YEAH RITE: Housing Minister sets ‘long-term’ house price target

During a Cabinet briefing, Minister Chris Bishop underscored housing affordability as arguably the most pressing economic and social challenge. He emphasized the need for a gradual approach, cautioning against sudden market disruptions that could lead to economic instability.

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Bishop outlined his target of achieving housing costs between three to five times household incomes, a significant reduction from current levels across most of New Zealand. He stressed the importance of moderation over time, aiming to substantially address the housing affordability issue within the next 10 to 20 years.

In his address to the Wellington Chamber of Commerce, Bishop revealed initial steps of his plan, which involve releasing ample land for residential development in major urban centers. Councils will be required to allocate land for housing development spanning 30 years, with provisions to streamline construction processes for increased housing supply.

Furthermore, Bishop pledged to ease regulations for building secondary dwellings such as granny flats, promoting more diverse housing options.

Highlighting the current strain on public finances due to housing costs, Bishop emphasized the urgent need for reform. He reiterated the government’s commitment to facilitating both outward expansion and upward development within city limits to address housing shortages.

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Acknowledging concerns about potential disparities in housing development, Bishop assured that natural and infrastructural limitations would regulate intensification efforts. He emphasized the gradual nature of change while stressing the imperative of increasing housing stock to combat affordability challenges.

Referring to the widely accepted benchmark of house price-to-income ratio, Bishop underscored the goal of achieving affordability, contrasting it with the current high ratios prevalent in major cities across New Zealand.

He declined to specify a timeframe for achieving these objectives, cautioning against overcommitment based on the complexities of land markets and economic dynamics. Instead, he emphasized an evidence-based, comprehensive approach aimed at long-term affordability solutions.