Robertson asks RBNZ not to worsen housing boom anymore; He suggests changing RBNZ’s policy remit to include ‘unnecessarily unstable house price inflation‘; Govt to review housing demand settings
I wonder if the Government is starting to regret the economic straitjacket it's put itself in. They've basically ruled out most of the major levers they could pull to stabilize the house prices. Is there anything left that they haven't ruled out which is more than just tinkering around the edges?
We can all see the problem, sadly the most effective solution keeps being placed out of bounds. Like going duck hunting but leaving the gun at home. Time to spend some political capital and remove the tax advantages associated with housing.
In jurisdictions with affordable housing, the housing market is just a low stable underwrite of the economy the provides security for people to then get out and do real productive things/investments that grow an economy.
The issue with Govt. housing and infrastructure initiates, is they have already or will still buy the land from land bankers, at hugely inflated prices. So irrespective of the number of houses being built, they will still be unaffordable, and yet the land banker gets to walk away with huge non-value-added capital gains, the $ amount of which could have been available to pay for any needed infrastructure and/or make the end product more affordable.
Not forgetting of course Govt. can never build anything on time or budget, unless it is subsidized by the taxpayer.
'He said Housing Minister Megan Woods would have more to say in the coming weeks, but he said he did not expect the Government’s own build programme of another 8,000 state houses over the next four years.' Did not expect what?
We have 3 problems. Housing affordability is due to the financial restructuring of the late 80's that allowed banks, with their money creation powers into the market. Supply issues are a more recent issue, driven by high levels of immigration. The third issue is the Policy capture by Free Market neoclassical economic paradigms all of which are theoretically dubious, and empirically unsupported , particularly the veil of RB Independence, designed to keep our elected officials hands off the financial tiller, and the lie/fear of government debt. We already see the (2 fingers) push back from RB in its response to Grant Robertson's letter. We wont cure affordability with increased supply. Independent Monetary policy is a folly, as is sticking to failed conventions. We need a coordinated response.
What of those property owners who since 1999 were free of the property inflation interest rate control mechanism that would have seen rising interest rates as house prices rose slowing demand.
So for those that borrowed against there equity to purchase another house, car asset etc, surely this is income bought foward and should be taxable?
I wonder if the Government is starting to regret the economic straitjacket it's put itself in. They've basically ruled out most of the major levers they could pull to stabilize the house prices. Is there anything left that they haven't ruled out which is more than just tinkering around the edges?
We can all see the problem, sadly the most effective solution keeps being placed out of bounds. Like going duck hunting but leaving the gun at home. Time to spend some political capital and remove the tax advantages associated with housing.
In jurisdictions with affordable housing, the housing market is just a low stable underwrite of the economy the provides security for people to then get out and do real productive things/investments that grow an economy.
The issue with Govt. housing and infrastructure initiates, is they have already or will still buy the land from land bankers, at hugely inflated prices. So irrespective of the number of houses being built, they will still be unaffordable, and yet the land banker gets to walk away with huge non-value-added capital gains, the $ amount of which could have been available to pay for any needed infrastructure and/or make the end product more affordable.
Not forgetting of course Govt. can never build anything on time or budget, unless it is subsidized by the taxpayer.
'He said Housing Minister Megan Woods would have more to say in the coming weeks, but he said he did not expect the Government’s own build programme of another 8,000 state houses over the next four years.' Did not expect what?
We have 3 problems. Housing affordability is due to the financial restructuring of the late 80's that allowed banks, with their money creation powers into the market. Supply issues are a more recent issue, driven by high levels of immigration. The third issue is the Policy capture by Free Market neoclassical economic paradigms all of which are theoretically dubious, and empirically unsupported , particularly the veil of RB Independence, designed to keep our elected officials hands off the financial tiller, and the lie/fear of government debt. We already see the (2 fingers) push back from RB in its response to Grant Robertson's letter. We wont cure affordability with increased supply. Independent Monetary policy is a folly, as is sticking to failed conventions. We need a coordinated response.
Dear Mr Robertson,
What of those property owners who since 1999 were free of the property inflation interest rate control mechanism that would have seen rising interest rates as house prices rose slowing demand.
So for those that borrowed against there equity to purchase another house, car asset etc, surely this is income bought foward and should be taxable?