Published on: 2016-12-15
By David Kneebone
I read with interest Jamie Strange's (Labour candidate for Hamilton East) letter to the Waikato Times Editor of 12 December.
Jamie pointed out the difficulty first home buyers, today, had in entering the housing market and raising the 20% deposit required. He opined that the government had not done enough to slow housing price growth.
It’s never been easy to get on to the housing ladder. I’m not sure if Mr Strange is aware that house price inflation in the first eight years of Helen Clark’s Labour Government was actually almost twice that of John Key’s eight years as PM.
Mr Strange also compared the housing market of Germany, and that country’s stable prices, to New Zealand's. Unfortunately, he overlooks one glaringly obvious factor in that Germany’s population growth grew by 4.5%, over the period he refers to, compared to New Zealand’s 41% population growth. In addition New Zealand’s home ownership, although declining, is way higher than that of Germany where half the population are renters.
It is easy for politicians to trot out these types of “apple with oranges” comparisons in a populist attempt to conjure political favour. However, a strategy to produce more affordable housing to shelter our growing population would be preferable. Perhaps removing Reserve Bank imposed LVR rules on investment in newly built housing is a way of incentivising the increase of our housing stocks quickly. The increase in supply thereby dampening the rampant house price inflation Mr Strange speaks of.