Auckland’s housing issues can’t be solved by fiddling with demand.
Taxes and high LVRs don’t work, and the proof already exists.
That’s because demand outstrips supply so much that even with the possibility of tax, or with a high LVR, the growth curve is so large it negates the effect. There is still plenty of cash to be made on the upside.
Demand levers won’t change a thing. Only supply will.
Which brings me around to it. So far supply hasn’t mustered any more capacity than 8,000 dwellings. It’s possible that the property industry is peaked out on capacity.
Except that in 2003-2005 the supply curve did hit 12,000 dwellings.
The main difference was that the majority of it was standalone houses on sections. Whereas now there is a vastly greater proportion of intensive housing.
Hint: greenfield development is the easiest way to increase supply.
The Government pretends to want it with talk of SHAs but isn’t really doing much more than sabre rattling. Read more »