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When it comes to housing affordability, there’s an elephant in the room

4 July 2017

Any political party is going to support the idea of “housing affordability”. Who wouldn’t!

The issue with housing affordability is that it relates to property prices. 

Broadly speaking, the way to make housing more affordable is to reduce property prices.

Many voters are property owners. For most of these people, the bulk of their wealth is in property.

To make property housing more affordable, it’s necessary to reduce the value of property, which in turn will reduce the wealth of a huge proportion of voters.

It doesn’t help that major interest groups (such as banks) are also interested in property maintaining its value, considering it relies on the security of these properties. 

For these reasons, most policies relating to housing affordability are symbolic and ineffectual.


Tags

elephant in the room, housing affordability, politics, regulation


About the author 

Sonnie Bailey

In his spare time, Sonnie likes telling people that he’s a former Olympic power walker, a lion tamer, or that he is an orthodontist. He is none of those things. In reality, Sonnie is a financial planner based in Christchurch. Through his business, Fairhaven Wealth (www.fairhavenwealth.co.nz), he provides independent, advice-only, fixed-fee financial planning services. Sonnie is a “recovering lawyer”: he has specialised in trusts and personal client work. He has also worked as a financial services lawyer for many years.

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