- Date published:
8:00 am, September 30th, 2015 - 23 comments
Categories: auckland supercity, bill english, local government, national, same old national, spin, you couldn't make this shit up - Tags:
The NZHerald reports Finance Minister Bill English warning that Auckland housing has a risk of a massive house price crash because of an over-supply of housing, eight years from the initial shock in demand.
Apparently a number of international studies show it takes eight years for a housing market to really react or correct. Would be great if he could table them.
He said the housing market was “probably the largest market in New Zealand where the rules need to be reshaped” and the most evident indication of a problem was Auckland house prices.
I have to quote the NZHerald because it was a private speech, so:
The point is that when the supply of housing is relatively fixed, shocks to demand – like migration flows increasing sharply as they have recently – are absorbed through higher prices rather than the supply of more houses.”
Long lead times in the planning process tended to drive prices higher in the upswing of the housing cycle. Planners, eh?
And those lead time increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed.
The resulting excess supply could produce a price crash.”
English blames planners and Councils. After the GFC austerity responses, after 2.5 National terms, after National’s legislated amalgamation of Auckland 5 years ago, after leaky homes, after corporatising both water and transport into CCOs across NZ, after not passing the cartels bill against materials suppliers, after the post-earthquke Christchurch rebuild, who else to blame is there but planners?