Finance Minister cautions Auckland first home buyers: Don’t


It’s remarkable to have a Finance Minister give such an overt warning to the market.

Bill English is cautioning first-home buyers about committing themselves in the current Auckland market, saying if they are patient, prices might fall soon.

He also indicated that if the Auckland Council does not accept a Unitary Plan that allows supply to meet demand, the Government could force it to do so by law.

The Finance Minister said there were risks in taking out a mortgage right now that stretched a two-income household.

“I’d just counsel patience, because you can see the supply picking up fast,” he said on TVNZ’s Q+A today.

“The supply is coming. Even if the demand stays pretty strong, it’s likely that prices are going to flatten out, and some parts of the market might drop back a bit.”

That had happened in Christchurch.

“There’s a belief that Auckland house prices will go up fast forever. That is not the case.”

National are clearly trying to get to the point where they can take credit for taming the Auckland housing market before the 2017 election run-up.   In addition, they don’t want lots of first home buyers who have negative equity paraded through the media after the Auckland market corrects.

He blamed house price inflation on two decades of Auckland planning rules which prevented the city from growing out.

The Unitary Plan, which is about to be presented to the Auckland Council by an independent panel for approval, needed to allow Auckland to grow “faster for longer”.

If the council turned down the plan, he said, the Government “would consider whether there is some kind of persuasive or legislative process to ensure that if the plan is sound, that the council adopts it”.

Phil Goff will have the government over a barrel.  They need Auckland to solve the housing problem sufficiently ahead of the election, and they’ll do it by force if needed.  A good negotiator will be able to make that pay for the Auckland ratepayer at the expense of the general taxpayer.


– TVNZ, NZ Herald

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