Successive Governments' inaction to blame for housing crisis, says Reserve Bank Governor

Connor Stirling
Source: 1News

Reserve Bank Governor Adrian Orr says successive governments and the Reserve Bank itself has not done enough to address the housing crisis.

Reserve Bank Governor Adrian Orr.

It follows the release of Real Estate Institute data showing the median house price in Auckland and Wellington has jumped by $100,000 in the last month alone – the largest monthly increase in 25 years.

However, the Governor told 1 NEWS the wider issue “didn’t suddenly just arrive.”

“This is in my lifetime, I think the fifth house price cycle,” he explained.

Asked why the issue has continued to grow, Orr blamed the market being weighted towards housing investment, as well as inaction at a central level.

“Successive governments have found it too hard, too difficult politically to make some of the big intergenerational changes that are needed,” he said.

He also reserved some of the blame for his own institution.

While housing prices have not traditionally been in the central bank’s remit, a letter from Finance Minister Grant Robertson last November asked for assistance in the space.

The letter “really allows us now to focus far more on that specific asset class, in fact it instructs us to,” Orr said.

Now the Bank is in a position to provide assistance, action is on the way.

“We haven’t done enough of what we can do and that’s what we will be doing over the next few months.”

See the full interview tomorrow on Q+A, 9am TVNZ 1 and 1NEWS.co.nz