New Zealand Labour Party

Reserve Bank points finger at Govt inaction

In scathing criticism of the Government’s inaction, the Reserve Bank says Auckland housing supply is growing nowhere near fast enough to make a dent the housing shortage, Labour’s Housing spokesperson Phil Twyford says.

Reserve Bank deputy governor Grant Spencer today warned speculation in the rampant Auckland housing market is creating a financial risk.

Grant Spencer warned “much more rapid progress in producing new housing is needed in order to get on top of this issue”. He also noted Special Housing Area (SHA) building activity has remained “very slow to date, with around 800 dwellings consented and 860 sections created in the 86 SHAs”.

As the Productivity Commission pointed out, Auckland is building about 5000 fewer homes than it needs just to keep up with population; and the shortfall is predicted to blow out from 32,000 to 60,000 by 2020.

“The poor old Reserve Bank once again has to carry the can for National’s failure to get a grip on the Auckland housing crisis. The new LVRs – which impose 30 per cent deposits on investors in Auckland – are the only significant housing policy we’ve seen in years, in stark contrast to the grudging half measures the Government keeps serving up.

“The Reserve Bank is clearly worried about the growing influence of speculators in the Auckland market and links it to further predicted declines in home ownership.

“Maybe the Nick Smith should stand down as Housing Minister and ask the Reserve Bank to take his job,” Phil Twyford says.