As the debate on the housing crisis intensifies, more commentators are pointing the finger at Labour and National's 'hands off' approach to housing. A Herald editorial says that the 'Government has stood aloof from matters', while Matt McCarten says that 'It is outrageous that a supposedly pro-worker government manages an economic policy that tolerates a situation where workers on the average wage in Auckland would have to pay 90 per cent of their take-home pay on a medium house mortgage' and that Labour are essentially fiddling while Rome burns. The Herald also highlights the plummeting rate of home ownership in NZ - as pointed out earlier on this blog - saying that 'Home ownership has dropped almost 10 per cent since 1990 - and that was the first decade since the 1940s in which it did not rise'.
Further to last week's posts (here and here) detailing the unaffordability of housing in NZ, there's been another study released that provides further evidence of what McCarten is calling 'a major societal catastrophe'. The Massey University study says that 'buying a house is at its most difficult level since the studies began in 1989', with the author, Professor Bob Hargreaves saying 'things are pretty grim for first home buyers'.
It is becoming obviously to even mainstream commentators that Labour and National's reluctance to build enough state housing has strongly affected the problem. Quite simply, the market cannot provide the housing needs of New Zealanders. As Prof Hargreaves states, the private sector does not have the capacity for building enough low-cost housing. He says there is a lack of big building companies, and 'Part of the reason why building costs are so high is most builders are just small time, they're only building a few houses every year.... If you've a large contract... you can drive the building costs down'. At the same time, a report on building consent figures show that the number of new properties is falling, and 'average cost of a new dwelling jumping 70 per cent in the past five years'. The Chief Executive of the Builders Federation says that the budget end of the building market is in decline 'and most new houses were increasingly luxurious'.