Why Len Brown is wrong on house prices in Auckland

Len Brown has made an audaciously bold claim that house prices in Auckland have peaked.

He’s no soothsayer so we can take anything he has to say with a grain of salt. What he would know about the property market you could write on the back of a postage stamp.

But he also implies that his leadership and Auckland Council’s efforts to increase housing are the reason housing is being built. Really?

The real reason housing and apartments are being built is because people are arriving here in vast numbers. Last month saw yet another?net immigration record, with Auckland accounting for most arrivals.

So let’s be clear – an immigration boom is causing developers to react and build. Not efforts by Len and his legion of bureaucrats. ? ?

Auckland Council didn’t facilitate immigration growth. And it didn’t get about encouraging developers to build either. It didn’t release loads of land to develop.

No, Auckland Council did nothing except idle away time and then react to process consents when they rolled in. So Council and its councillors can’t lay claim to anything.

Auckland Council is a passive organisation. Which is part of the problem. It does nothing to work and grow the country’s biggest city. In fact there is more evidence of it hindering growth and choking our economy. To grow Auckland the Council needs to unblock development through supply of land, not squeeze it.

There is still a clear shortfall between what is built and what is needed. That typically implies house price growth unless land supply is urgently released to curb that. No plans from Auckland Council though.

The?Productivity Commission can see it and recommended that government should set price thresholds at which councils would be forced to release more land. Because they don’t.

Ironically Len Brown and Auckland Council oppose that idea. Unless they plan to release lots of land shortly, the only thing that can be assured is stiff competition will continue to drive up house prices.

Which means Len is wrong.