If we’re not building houses we’re ‘buggered,’ says economist

Source: Q and A

In a bid to cool the over-heated housing market, the Government announced on Tuesday it will increase the bright-line test from five to ten years, remove the ability for landlords to claim a tax rebate for the interest they’ve paid on their mortgage, raise the caps for the First Home Loan scheme and First Home Grants scheme.

They’ll also set up a $3.8 billion “accelerator fund” that will help with infrastructure for new housing.

Speaking on Q+A with Jack Tame, Wellington City Councillor Tamatha Paul said she was “underwhelmed” by the Government’s plans.

“I’m reading that it’s this transformational package but to me it makes no difference. And to other renters and other young people it doesn’t make any difference. I would ask that the Government be more bold.

“We have more Māori, Pacific, migrant and refugee members of parliament than we’ve ever had in our history [but] families are sleeping in vans, Lambton Quay is flooded with people who are not eligible for transitional housing, and preventable diseases like rheumatic fever are running rampant in our communities because we can’t live in safe and healthy housing.

"So when I look at this package it doesn’t respond to the fact that we have a human rights crisis and it is that there isn’t enough housing.”

Economist Shamubeel Eaqub described the announcement as a tactical move, designed to buy the Government time.

“This stuff wasn’t about boldness and urgency, this is band-aids to make sure we don’t see house prices keeping that sort of rocket trajectory.”

Reporter for 1 NEWS Katie Bradford, who has been covering the housing crisis, characterised the Government’s response as “a lot of tinkering”.

She acknowledged that the housing crisis is “a result of successive governments failing to be brave enough to do what needs to be done".

However she argued, “Labour had three years to do more, during their first term.” And even more recently, “they could have come out in December and done this. I know there was an election, I know there was Covid, but we could see by December just how quickly prices were going up and the impact, the real world impact it [was] having on people.”

Eaqub says a lot of detail was still to be ironed out and announced, but the Government had to tread carefully.

“You cannot afford to spook new supply. I mean we know that, yes you can do the stuff on demand, but if we’re not building houses, we’re buggered.”

Paul urged the Government to focus on fixing things for those she called “collateral damage in this war between the Haves of New Zealand”.

“They’ve got the most political capital that they’ll probably have while they’re in government and I think they’ve got the social licence to do something bold.”