A new productivity watchdog, consisting of around 21 people and with a budget of $5 million, has been set up by the government. I admit, the idea of a productivity watchdog terrifies me. Imagine an enormous dog barking at me whenever I’m unproductive. The poor dog would have keeled over by Tuesday afternoon.
However, I digress. The watchdog’s first job will be to examine why housing is so unaffordable, particularly in Auckland. Residential housing in Auckland has been rated as more expensive than New York, though the most recent data shows that houses are at their most affordable in seven years. At the top of the unaffordability index are New Zealand, Hong Kong and Australia, all classed as severely unaffordable.
What else do they have in common? They’re all awesome places to live. Australia and New Zealand are all over the ‘best places to live’ lists each year. And Hong Kong is the investment of choice for many wealthy mainland Chinese; it’s also an international business hub and one of the world’s top centres for the squillion-dollar horse-racing industry. I think it’s safe to assume that demand to live in these places is extremely high.
I know that there are other reasons that housing is unaffordable, such as:
There aren’t enough houses to go around.
If you want to build a nice new development, you must complete a Krypton Factor-like series of tasks and assault courses in order to get permission.
Um, something about urban sprawl.
Investors are awful, and first home buyers are like sweet little bunnies.
Other stuff involving bubbles, booms, busts and boobs. (Okay, maybe not boobs.)
Clearly, I’m no economist, but real economists know a lot about this stuff already. So, I’m optimistic that this watchdog group will review all the existing information and draw some nice, helpful conclusions which assist council planning decisions and Government policy. The other alternative is that the watchdog will spend a long time and a shedload of cash and then tell us what we already know, then this information will fail to be acted on by any other institution.
Has to be a worthwhile opportunity for some consulting income :-)
On 10 April 2011 at 7:56 pm John said:
Ok...so housing is unaffordable. Begs the obvious question then - why are all houses actually owned? Oh - did you mean unaffordable to people with not much money or income. Yup, might be unaffordable to them. Guess thats why they invented... RENTING!
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A new productivity watchdog, consisting of around 21 people and with a budget of $5 million, has been set up by the government. I admit, the idea of a productivity watchdog terrifies me. Imagine an enormous dog barking at me whenever I’m unproductive. The poor dog would have keeled over by Tuesday afternoon.
