PHOTO: Government to wait until next year to act on the housing crisis. Credits: Video – Newshub; Image – Getty
A leading economist fears the Government will be forced into making a “knee-jerk” move to rein in house prices soon, with prices “skyrocketing” out of reach.
Values went up 2.6 percent in December, far outstripping inflation, capping off a year in which they defied all expectations – continuing to rise through the COVID-19 pandemic and recession.
Analysts CoreLogic last week tipped they’ll continue to rise this year, “without any major policy change regarding property in the works”.
A number of high-profile economists told RNZ on Tuesday something had to be done urgently to prevent more Kiwis being forced out of the market, such as higher loan-to-value ratios to squeeze out investors and freeing up land.
National housing spokesperson Nicola Willis even called for emergency measures like those put in place to help rebuild Christchurch, “specifically to increase urban land available for intensification and to release more land for subdivisions”.
Infometrics senior economist Brad Olsen said there are few problems as big as the housing crisis facing the country.
“It seems to be outside of COVID the only conversation that every household would have discussed over summer – seeing those house prices going up,” he told Magic Talk on Wednesday.
“If you don’t have a house, trying to figure out what strategy you’re going to use to get on that housing ladder; if you’ve got a house, trying to figure out how much money you’ve made.”
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