Is the National Party Finance Spokesperson serious about helping property developers borrow money?
The Nats seem to be promoting random market interventions that would make most serious economists blush. For example, today it is being reported in the National Business Review that "[Finance Spokesperson] Bayly said National was much more focused on increasing the supply of housing, as well as doing more to ensure money in the banking sector went into the productive sector. For example, at the moment it was difficult to borrow money for property development, leading to an upsurge in non-bank lending. Instead, at least $18b of loans had simply gone into “buying & selling our houses”. An injection of that sort of money was always going to drive up house price inflation", he said.
Is Bayly recommending some form of State Capitalism in NZ along, for example, the lines in China or Dubai? Most free market Western economies have tried hard to stay away from the government directing flows within the banking system to favored industries. That's been left to the (private) financial sector to decide.
So what does he mean that it is "difficult to borrow money for property development"? Interest rates are at historic lows and to the extent property developers are paying a premium on loans compared to others, maybe its because property development is .... a risky business (!) Is he advocating a State intervention to help property developers get access to cheaper finance!?
For sources, see: