New Zealand Labour Party

Government’s housing failure puts pressure on Reserve Bank

The Government’s failure to take action on the housing crisis has put pressure on the Reserve Bank Governor who has to deal with a rampaging housing market and low inflation at the same time, says Labour’s Finance spokesperson Grant Robertson.

“This Government has given up on dealing with the housing crisis and effectively outsourced it to the Reserve Bank, giving the Bank a serious problem.

“Inflation is below the 1% – 3% target, meaning the official cash rate won’t be lifted, but the housing market in Auckland is out of control, putting pressure on to raise interest rates.

“Now there is talk of the Reserve Bank pulling out more macro-prudential tools but the damage the LVRs have done to first home buyers and house prices in provincial New Zealand shows the dangers of financial stability tools being used to stifle a housing crisis that is mainly limited to two cities.

“The Government should not be leaving it to the Reserve Bank. John Key just needs to build more houses in Auckland, not tinker with the RMA.

“Auckland needs more houses. That’s how to get Graeme Wheeler out of his spot between the rock and hard place,” says Grant Robertson.