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Is Labour to Blame for the Housing Affordability Crisis? Short Answer: No.

This blog strives to be non-partisan in its approach to commenting on NZ public policy. Yesterday we argued that it is unlikely much of the blame for rapidly rising house prices in Auckland should be attributed to returning expat Kiwis, fleeing the virus from other nations, which the Finance Minister appeared to recently suggest. Hot on the heels of his comments, some former high profile National Party politicians are trying make Labour look bad for the housing affordability crisis.


So lets be very, very clear on the root cause of the problem. The population of NZ has grown by an astonishing 25% (from 4 to 5 million people) in less than two decades. A large part of that increase occurred under the Key-led National Party government, during which immigration reached exceptionally high levels. The Key government was fully aware of the pressures on the housing market right from the start. Six months before it won the election in November 2008 a report called "House Price Increases and Housing in NZ" had been completed by the Prime Minister's Office under Helen Clark. It stated that "Population growth, lower interest rates than during much of the 1980s and 1990s and increasing availability of credit have all boosted demand ... Supply responses in the housing market tend to be slow".


In other words, twelve years later, we are still having the same conversation. What we are dealing with is a bi-partisan policy failure, whereby both National and Labour have done little in terms of serious policy innovation for decades now, having relied on spin-doctors to make it appear they have bold plans, when actually they do not.


For the 2008 report, see:


https://dpmc.govt.nz/sites/default/files/2017-03/hpr.pdf


For a former National Party politician blaming Labour, see:


https://www.nzherald.co.nz/business/steven-joyce-its-housing-for-the-haves-and-no-relief-in-sight-for-the-have-nots/AHFCPMYPKMZQYFCOQEG3JOUWQQ/