What is the cause for our affordability crisis?
When is our housing affordability problem going to be solved?
Following Nick Smith's recent interview on The Nation, viewable at the link below (hat tip: Hugh Pavletich): I wondered what exactly are the causes of our predicament?
It is indeed a pity that the Stuff article quoted Hugh Pavletich as blaming the Central Government only. It is Local Government that zones land and has the financial tools for infrastructure financing, isn't it? I can see the argument that it is the Government is more prone to being blamed and voted out (i.e. a Waterloo) but they are not the only ones to blame, surely?
Where I do think Nick Smith is caught is he doesn't want a collapse in house prices as many mortgages would be more than the house is worth. Is that really true as I thought the Reserve Bank stress testing looked at that scenario. What he does want is house prices rises to be in single digits. From a median multiple of 10, that policy target means we are headed for continued extreme unaffordability.
We do we got to from here? Does anyone in our political establishment want to put in the policy changes needed for my house to go from its current $1million price tag down to what it is truly worth: about $350,000?
