In the blue corner
New Zealand is facing a housing crisis and what underpins it is a severe shortage of homes accompanied by house price inflation. These two factors have driven inequality up and locked too many hardworking Kiwis out of a home.
Labour have been in Government for 4 1⁄2 years and they have failed many Kiwis trying to buy their first home. In doing so, they have also overseen amassive increase in rental prices. Data released by the Ministry of Business, Innovation and Employment shows that the median rent has reached $540 per week.
In October last year National proposed game-changing housing reforms with a bill that will help address some of the issues with housing choice and affordability in our largest cities.
The Resource Management (Enabling Housing Supply and Other Matters) Amendment Bill amends the Resource Management Act and was adopted by the Government. The bill will reverse the land use restrictions and arcane planning rules which have strangled new housing developments in the past. This will go a long way to increasing the supply of homes in New Zealand, and shows just how committed National is to Kiwis hunting for their first home.
Unfortunately the news last week of the biggest official cash rate (OCR) hike in 22 years will only further damage people’s hopes of owning their first home. The minister of finance is addicted to spending, which has stoked along inflation.
Not only are we facing a large OCR hike but also a cost of living crisis which is keeping New Zealanders out of homes. We are on the way to getting the regulatory framework in the right place through the housing bill but the question is how much economic damage due to profligate spending will be done between now and then.
Grocery food prices are almost 8% higher now than they were a year ago, and fruit and vegetables have increased by almost 18% in the same time period.
If people can’t afford the basics like food, electricity and rent, then the chances of them saving enough for amortgage or a deposit on a house are sadly low.
Housing problems in New Zealand are related to supply and cost. National have proposed solutions to the former but the latter can only be altered by the Government of the day. If the minister of finance continues to get out the cheque book and stoke along inflation and increase the cost of living, then the dream of Kiwis owning their own home will become more unrealistic.