Land for more houses good for Auckland housing supply

A joint government and Auckland Council move today to make land available for 6000 new affordable houses in ten more special housing areas has been welcomed today by the New Zealand Bankers’ Association as a positive step in addressing the housing supply issue in Auckland.

“The big issue in the Auckland housing market is a lack of supply. Freeing up land for housing is a move in the right direction to help improve supply where it’s needed and alleviate pressure on house prices,” New Zealand Bankers’ Association chief executive Kirk Hope said.

“Credit growth is currently around 5.4%, which is not high. The availability of credit is not driving Auckland property prices – it’s the lack of supply. Today’s announcement is a constructive move to address the supply challenge.

“We have the opposite problem that parts of the United States and Ireland had a few years ago where an oversupply of housing contributed to a fall in property values resulting in negative equity for many home owners. That’s not the New Zealand experience.

“Addressing the supply issue may also reduce pressure on the Reserve Bank to use tools like low equity lending restrictions in an effort to maintain financial stability,” said Hope.