Sup­ply won’t fix hous­ing prob­lem

Kapi-Mana News - - OUT & ABOUT - GOR­DON CAMP­BELL TALK­ING POL­I­TICS

avail­abil­ity of cheap credit, and the tax re­lief avail­able via neg­a­tive gear­ing.

Af­ter all, we are al­ready build­ing more houses, but prices are, if any­thing, still go­ing up. When, ex­actly, does the the­ory pre­dict that the sup­ply will suc­ceed in de­flat­ing the price bub­ble? Right, that would be some­time in the misty for­ever.

Across the Tas­man last week, some Aus­tralian aca­demics and hous­ing agen­cies wrote an open let­ter to the New South Wales gov­ern­ment strongly crit­i­cis­ing its re­liance on the sup­ply equals af­ford­abil­ity the­ory.

As NSWu­ni­ver­sity pro­fes­sor Bill Ran­dolph pointed out, in­creased sup­ply would not nec­es­sar­ily lower the price of hous­ing.

‘‘The prob­lem is you can’t ap­ply year 10 eco­nomic the­ory to a met­ro­pol­i­tan hous­ing mar­ket,’’

‘‘There is no sil­ver bul­let to New Zealand's long­stand­ing hous­ing is­sues.’’

Newspapers in English

Newspapers from New Zealand

© PressReader. All rights reserved.