Banks agrees prices are too high

Monday 30 July 2012

ACT Leader John Banks supports Finance Minister Bill English’s claim that house prices are “ridiculously high” and that affordability issues are “turning off” young New Zealanders.

By The Landlord

English's statements were reported on Friday.

Banks said that unless action was taken to resolve the affordability problems, a generation of New Zealanders would grow up "tenants in their own cities".

"We would like to see National heed the advice of the Productivity Commission by removing restrictions on land supply for residential housing.”

In March, the Commission flagged tight land supply, a slow consenting process, and poor productivity in the construction sector as contributing to unaffordable housing much more than New Zealand's tax structure.

Banks said the cost of land was one of the major factors behind rising house prices in Auckland, He said it now made up 60 per cent of the total cost of an Auckland home, compared to 40 per cent in other parts of the country.

"We also believe a radical reform of the RMA is required. The original intention of this legislation was to make development easier. It has done everything but. The vague language has turned it into a bureaucratic nightmare."

He said adopting the Commission's reccomendations would focus councils on real economic and environmental costs and benefits, instead of the "sea of fluff" that is the principles of the RMA.

"The housing affordability issue we face today is not a result of market failure, but of poorly-drafted legislation and government interference. These changes would go some way to resolving this," Banks said.

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