What goes up, must come down. Don Brash tells us what we all know, but politicians dare not speak:
Dr Don Brash says house prices in Auckland have to fall if they are to get back to affordable levels but politicians of both the left and right are terrified of saying so.
“I cannot see how indefinitely we can continue in cloud cuckoo land. That’s where we are now.”
Brash said it was impossible to go from the current situation in which Auckland median house prices were 10 times the median household income to a more affordable ratio of three or five without a fall in prices.
“Politicians on the right and left are terrified of spelling out the implications of that.”
Brash, a former Reserve Bank Governor and a former National Party leader, said the house prices in Auckland were a huge problem, both economically and socially.
“People on average wages in Auckland simply cannot remotely aspire to own a house,” he said.
“That is a very damaging situation socially – overcrowding, health problems, people not having enough income after rent or mortgage interests are paid to keep body and soul together.”
And yet it has its parallels in other cities around the world where land supply has been artificially curtailed. Sydney, Toronto and even Queenstown are examples of this. You can’t escape the supply-demand curve. Read more »