English: Supply the issue

In a speech at an Infratil investor day, he said comment about foreign buyers in the market was a distraction from underlying supply and infrastructure issues.

If house prices continued to rise at their recent rates, interest rates would have to go up more aggressively than had been signalled, he said.

The debt burden it would put on families would mean the need for more things like Working for Families.

The gap between those who could and couldn’t afford to buy contributed to equality, he said.

English told the meeting that there would be opportunities for building firms to develop medium-density state housing, as part of this year’s planned social housing reforms.

``There's room for a product, not a gold-plated Ryman product, for around 15,000 tenants in some kind of medium density communal living. We could have Housing Corp do that and it would be a long, slow process or we could have a market compete to provide that product, which could allow us to free up a large part of our stock relatively quickly.”

He said, one way or another, the Government would become the main buyer of medium-density housing in the main New Zealand markets.