Market must be challenged

The Government must address the state of the housing market, writes Ian Munro.

Home ownership rates are at their lowest since 1950.

The NZ Housing Foundation, in its April 2017 Research Bulletin, confirms what we all know:  that the housing market isn’t working; the housing crisis is real; and housing tenure is a significant factor for positive social and economic outcomes.

A 2016 IMF survey shows that New Zealand had the second-highest growth in house prices during 2015, and the highest price increases relative to income of any country. And we’ve all seen that price increase virus spread steadily down the country.

Further, the Housing Foundation’s research found that home ownership, as opposed to renting, is significantly associated with positive health, crime and educational outcomes.

Helping families out of rental accommodation and into affordable home ownership leads to greater engagement in the community, stronger affiliations, different and higher expectations, and better quality of life and outcomes.

Business and Economic Research Ltd, studying 1000 private and 1000 social housing renters, found that moving these families into their own homes would deliver the Government savings of $17.5 million annually because it would result in less spending on health care, welfare and accommodation supplements.

The rapid increase in house prices and in the cost of renting is not a product of the success of the market, as some leading politicians would have us believe. It’s a result of the market failing to meet the needs of the families of this country.

It was always going to fail. The market is inherently selfish. Its check and balances, its self-corrections are ruthless and without regard for consequences. It has no social conscience, no compassion.

It’s no coincidence that our growing social ills coincided with the rise and rise of the market and the drop in home ownership.

Politicians and many economists speak as if the market is some sort of deity, as if it alone has responsibility for our economy, as if it is all-seeing, all-knowing, all-wise and must not be challenged.

The market must be challenged and it is only the Government that can do this. The Government, tasked by the very nature of a democracy as a servant of the people to look after its citizens and particularly the weak and vulnerable, has a moral obligation to do so.

There are significant challenges in turning this ship around, not least the lack of skilled tradespeople resulting from the market working its "magic".

Would you want to raise your family in a garage, a shed or the back seat of a car in a public car park?

Ensuring every child has a sound, dry, warm home is vital in moving New Zealand back to being a country that’s great to raise all our children in. It’s their birthright.


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