National governments are terrible managers of the economy. Historically they have brought us lower growth and higher debt than Labour governments. The current lot are amongst the worst.
Consider, for example, the mess the Nats are making of the housing market. Instead of addressing the real problems of supply and speculation, Bill English tried to mask the symptom of escalating prices with an easy but ineffectual LVR (Loan to Value Ratio) restriction (while simultaneously undermining it with Welcome Home Loans). This despite being warned by Treasury that LVR restriction would likely hurt first home buyers – which it duly did.
Last Monday English called for the LVR restriction to be removed:
Mr English said today pressures were easing, and while decisions on LVRs are for the Reserve Bank to make, he thinks its managers will move. “They find themselves in a world where the current interest rate pressure is less than they expected and probably house price inflation is a bit lower than they expected. … “There’s less pressure to have them now than there was and I would expect that the bank is looking at the path to the end of LVRs.”
Pressures are easing? Really? Yesterday:
Spring house price surge in October
Auckland house prices have hit a new high and national sales volumes rose 11.8 per cent last month in a big spring resurgence. Real Estate Institute data just released showed Auckland’s median price reached a new record of $640,500 which is $3500 above the previous high set in March.
…
Auckland’s median price rose 10.1 per cent or $58,500 from October last year to last month. Prices were up in Manukau, Auckland and Waitakere cities. The region’s median price rose $25,500 (+4.1 per cent) from September to October, with Waitakere and Manukau cities recording the largest median price increases.
Oh and just for good measure:
Flush owners cashing in on rising house values
Homeowners feeling flush after learning their newly-released property values are borrowing more from banks to splurge on new cars, boats and home renovations. … Anyone feeling rich after seeing their home’s paper value shoot up – many by over 40 per cent – should think carefully before piling thousands more on to their mortgage …
Yup, it sounds like pressures in the property market are “easing” all right. Bring on those fifty year mortgages.
Message to the economic geniuses of Planet Key. The housing bubble is out of control and you are just tinkering at the edges of the problem. You need to address the real issues – supply and speculation. Labour has readymade policy you could steal – Kiwibuild and a capital gains tax.
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