Housing and First Home Buyer in NZ
Bill and his friends have once again started the pointing game. Now that there is no previous government to blame they are shifting responsibilities to the Reserve bank of NZ.
While we all agree that RBNZ has authority over the monetary policy to control the flow of money and to ensure Financial stability, the goverment, I personally think should use its powers to implement policies via the different instruments available like IRD etc. to control and keep a watchful tab on the house prices.
The various discussions with regard to Resource Management and Increase in supply of housing stock are only valid to the extent of the extra supply created as a result of the initiatives.. The presumed increase in supply should be substantial in order to really make an impact on the demand supply balance. The reason being that a small increase will only encourage and make available housing stock for those hardy Investors (or should I call them Speculators). We know that the housing market is full of these speculators as is evident from the transactions and the change of ownership of property already being rented out.
The first home buyer is crowded out of the market by these investors /speculators and also the LVR and mostly by the unaffordably high house prices.
Now, (as of today 15/04/2015), we see and hear the RBNZ deputy governor Grant Spencer is calling on the Government to reconsider potential policy measures to address the tax-favoured status of housing investment, and wants land bankers tackled and more high density apartments built in Auckland.
In a speech to the Rotorua Chamber of Commerce, Reserve Bank Deputy Governor Grant Spencer said the Reserve Bank was itself assessing other macro-prudential tool options in addition to restrictions on banks’ high loan-to-value ratio home loans, including in relation to investor lending, to tackle an overheating housing market. (excerpt from interest.co.nz) –>