New Zealand property bubble

A house price bubble is defined by economist Joseph Stiglitz as a period of speculative purchases, where investors demonstrate willingness to pay a high price today because they believe that it will be as high (or higher) tomorrow.Stiglitz, J.E. (1990). “Symposium on bubbles”. In: Journal of Economic Perspectives Vol. 4 No. 2, pp. 13–18 A 2016 study found evidence of a bubble in the New Zealand housing market from 2003, which stalled in 2007/8 with the impacts of the Great Recession.{{Cite journal |last1=Grimes |first1=Arthur |last2=Holmes |first2=Michael |last3=Tarrant |first3=Nelson |title=Hot Property in New Zealand: Empirical Evidence of Housing Bubbles in the Metropolitan Centres |journal=CORE Repository |date=2016 |url=https://core.ac.uk/download/pdf/62412409.pdf |access-date=October 27, 2024}}

{{Cite web |title=New Zealand housing bubble in 2003-2008 |url=https://www.interest.co.nz |website=Interest.co.nz |access-date=October 27, 2024}} A second bubble appeared in Auckland in 2013, and until 2015 there were no notable spillover effects to other regions.{{Cite journal|last= Greenaway-McGrevy|first= R.|date=2015|title= Hot property in New Zealand: Empirical evidence of housing bubbles in the metropolitan centres|journal= New Zealand Economic Papers|volume= 50|issue= 1|pages= 88–113|doi= 10.1080/00779954.2015.1065903|hdl= 2292/25259|s2cid= 16641463|url= https://ink.library.smu.edu.sg/soe_research/1947|hdl-access= free | quote = Evidence from the latest data reveals that the greater Auckland metropolitan area is currently experiencing a new property bubble that began in 2013. But there is no evidence yet of any contagion effect of this bubble on the other centres, in contrast to the earlier bubble over 2003–2008 for which there is evidence of transmission of the housing bubble from Auckland to the other centres.}} However, from 2015 onwards, rapid price-growth occurred in smaller centres.{{cn|date=March 2021}}

Housing in New Zealand has been strongly shaped by colonisation (beginning in the 19th century), pre-war state intervention, post-war state intervention and economic and financial reforms introduced since the 1980s. Although the indigenous Māori population traditionally lived communally, European settlers – many fleeing the slum conditions of Victorian Britain – established a trend favoring individually-owned houses, each built on a separate section of land – the fabled quarter acre, in a similar vein to the American white picket fence.{{cite news |author=John Burn-Murdoch |date=2023-03-17 |title=The Anglosphere needs to learn to love apartment living |publisher=Financial Times |url=https://www.ft.com/content/dca3f034-bfe8-4f21-bcdc-2b274053f0b5 |archive-url=https://archive.today/20230319101428/https://www.ft.com/content/dca3f034-bfe8-4f21-bcdc-2b274053f0b5 |url-status=dead |archive-date=2023-03-19 }} New Zealand society as a whole continues to dream the dream of owner-occupied home-ownership despite changing economic and environmental conditions. The local real-estate sector promotes myths of moving onto (and up) the property ladder

{{cite web

|url= https://theworldnews.net/nz-news/reinz-welcomes-national-s-announcement-to-repeal-90-day-no-cause-evictions

|title= REINZ Welcomes National's Announcement To Repeal 90-day No Cause Evictions

|date= 10 May 2020

|publisher= World News LLC

|agency= Scoop Media

|access-date= 24 March 2021

|quote= The Real Estate Institute of New Zealand (REINZ) has today welcomed National’s housing policy announcement [...] Bindi Norwell, Chief Executive at REINZ says: '[...] In terms of social housing tenants being able to buy their own state house, this is a great initiative and will hopefully allow a number of people to be able to get a foot on the property ladder for the first time [...]'.

}}

accordingly, and New Zealand politicians foster the idea of a stable democracy rooted in property-ownership.

For example:

{{cite web

|url= https://www.act.org.nz/housing-and-infrastructure-strategy

|title= Build Like the Boomers

|website= ACT Party

|publisher= ACT New Zealand

|access-date= 24 March 2021

|quote= Safe, secure, and affordable housing provides a platform for a stable family. Homeownership gives everyone a stake in society.

}}

Compare:

{{cite web

|url= https://www.labour.org.nz/housing

|title= Labour's 2020 campaign policies: Housing

|website= NZ Labour Party

|publisher= New Zealand Labour Party

|access-date= 24 March 2021

|quote= Labour will continue rolling out a Progressive Home Ownership scheme that will support lower income families struggling to pull together a deposit, or pay a mortgage, into home ownership.

}}

Compare:

{{cite web

|url= https://www.national.org.nz/housing-infrastructure-world-class-cities

|title= Housing, Infrastructure & World Class Cities

|year= 2020

|website= New Zealand National Party

|access-date= 24 March 2021

|quote= The massive recent house price increases are further locking our children out from ever buying a home. [...] The housing emergency is driving up inequality, and it is hitting young New Zealanders the hardest. We are already seeing a major increase in the working poor here in New Zealand, where people put in the hard yards but still can't get ahead. These house price increases just make it worse.

}}

In 1977, the Town and Planning Act was passed, which began to make it easier for NIMBYs to oppose new housing nearby and force down-zoning. This caused house prices to rise by an average of 2% for every 1% increase in population between 1977-2018, compared with 0.5% rise per 1% population increase between 1938-1977.{{cite news|url=https://www.stuff.co.nz/business/128260630/infrastructure-commission-politicians-and-nimbys-created-the-housing-crisis?cid=app-iPhone|title=Infrastructure Commission: Politicians and Nimbys created the housing crisis|author=Dileepa Fonseka|date=2022-04-05|publisher=Stuff }}

The fourth Labour Government (elected in 1984) rapidly introduced policies of economic deregulation,{{cite web|url= https://teara.govt.nz/en/economic-history/page-11|title= Government and market liberalisation

|publisher= Te Ara Encyclopedia of NZ}} as a result of the previous Prime Minister Robert Muldoon's Think Big policies that had left the country heavily in debt.{{Cite web|last=Hembry|first=Owen|date=31 January 2011|title=In the shadow of Think Big|url=http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10703096|url-status=dead|archive-url=https://web.archive.org/web/20140110141613/http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10703096|archive-date=10 January 2014}} Investment in shares increased rapidly, often with little due diligence carried out.{{cite news|url= http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10841675|title= Property fallout would top '87 share crash|last= Gaynor|first= Brian|date= 20 October 2012|work=New Zealand Herald }}{{cite news |url= http://www.radionz.co.nz/national/programmes/eyewitness/audio/201857329/black-monday |title= Eyewitness: Black Monday |author= Nadine Higgins |date= 7 September 2017 |publisher=Radio New Zealand }} The 1987 sharemarket crash hit New Zealand's economy especially hard,{{cite news |url= http://www.nzherald.co.nz/indepth/business/1987-stock-market-crash/?ref=NZH_Tw |title= The Crash |author= Liam Dann |date= 12 October 2017 |publisher=New Zealand Herald | quote = In October 1987 a stock market crash shook the world. Nowhere was hit harder than New Zealand.}} with the NZSE dropping around 60% from its peak.{{cite web | url= http://www2.stats.govt.nz/domino/external/web/nzstories.nsf/0/1ea7f51215015a74cc256b1f0004f99a/Body/0.2856?OpenElement&FieldElemFormat=jpg | title= Share Price Index, 1987–1998 | url-status= dead | archive-url= https://web.archive.org/web/20100525104207/http://www2.stats.govt.nz/domino/external/web/nzstories.nsf/0/1ea7f51215015a74cc256b1f0004f99a/Body/0.2856?OpenElement&FieldElemFormat=jpg | archive-date = 25 May 2010 }}{{cite web |url= http://www2.stats.govt.nz/domino/external/web/nzstories.nsf/0/1ea7f51215015a74cc256b1f0004f99a?OpenDocument |title= Commercial Framework: Stock exchange, New Zealand Official Yearbook 2000 |publisher= Statistics New Zealand|access-date= 8 December 2014|url-status= dead |archive-url= https://web.archive.org/web/20160304054026/http://www2.stats.govt.nz/domino/external/web/nzstories.nsf/0/1ea7f51215015a74cc256b1f0004f99a?OpenDocument |archive-date= 4 March 2016}} Many investors who lost heavily in the 1987 crash never returned to the sharemarket, instead opting for the apparently safer option of property investment.{{cite news |url= http://www.newshub.co.nz/home/money/2016/08/shares-outperform-property-but-not-popular-investment-choice.html |archive-url= https://web.archive.org/web/20171012202754/http://www.newshub.co.nz/home/money/2016/08/shares-outperform-property-but-not-popular-investment-choice.html |url-status= dead |archive-date= 12 October 2017 |title= Shares outperform property, but not popular investment choice |author= Tony Field |date= 3 August 2016 |publisher=Newshub | quote = Mr Beale says Kiwis naturally don't like investing, and are very focussed on property, with memories of the 1987 crash still lingering.
'It seems New Zealand is still not investing in the share market because of what happened in the 1987 sharemarket crash.'}}{{cite news | url= http://www.nzherald.co.nz/philip-macalister/news/article.cfm?a_id=32&objectid=10011156 | title= The touch factor |date= 15 February 2005 |publisher=New Zealand Herald | quote = The allure of property investment is quite multifaceted. To some it is the touchy, feely factor. They can buy a property, drive past it and touch it, which is something they can't do with shares and bonds.[...] Others have had bad experiences with shares (think the 1987 sharemarket crash, investors who got burnt haven't forgotten) and other savings schemes and are looking for alternative forms of investment.}}

In 1989 Parliament passed the Reserve Bank Act, which emphasised keeping a lid on inflation and on interest rates, which in turn reduced the costs of borrowing for fixed assets such as houses. In the same year, tax exemptions for pension, insurance and other similar investments were abolished, but not for real estate. Two years later, the Resource Management Act (RMA) replaced a raft of regional-planning laws, including the Town and Planning Act. Some{{who?|date=March 2021}} have regarded the RMA as an obstacle to building affordable housing.

{{cite news

| url= https://www.newsroom.co.nz/2017/04/19/19623/housing-1989-generation-rent

| title= 1989 was year zero for Generation Rent

| author= Bernard Hickey|date= 19 April 2017| publisher= Newsroom.co.nz

| quote = As the Productivity Commission and the current government has pointed out repeatedly in recent years, the RMA ushered in an era where councils and residents were more reluctant to open up land for housing, partly because it was easier to object to new developments, and partly because the funding arrangements for councils made it more difficult.
The end result was New Zealand's house building rate dropped from around nine homes per 1,000 people per year during the 1950s, 1960s and 1970s to around five homes per 1,000 people through the 1990s and 2000s. The potential for extra housing supply to both respond to higher house prices and then soften the growth was ripped out by the effects of the RMA and council funding mechanisms.

}}

Although builds and sell-offs of state houses have happened in cycles since the inception of the state housing scheme, they were sold off in record numbers during the 1990s without being replaced.{{cite web |url=https://teara.govt.nz/en/graph/32421/total-state-housing-stock |title=Total state housing stock |publisher=Te Ara - Encyclopedia of New Zealand}}{{cite web |url=https://kaingaora.govt.nz/about-us/history-of-state-housing/ |title=History of State Housing |publisher=Kāinga Ora – Homes and Communities }} The number of state houses in the country peaked at 70,000 in 1991 until the sell-offs.{{cite news |url=https://www.rnz.co.nz/news/on-the-inside/304722/is-nz-facing-a-crisis-of-conscience |title=Is NZ facing a crisis of conscience? |author=Shamubeel Eaqub |date=2016-05-25 |publisher=RNZ }}

Alongside institutional reforms in the housing sector, problems with poor-quality construction, historic injustices and under-provision for the needs of indigenous Māori,{{Cite web|url= https://www.oag.govt.nz/2011/housing-on-maori-land/part2.htm|title= Part 2: Māori housing needs and history, and current government programmes|website= Office of the Auditor-General New Zealand|language= en-nz|access-date= 1 November 2019}} and persistent income inequality,{{Cite web|url= https://www.stuff.co.nz/business/88455171/the-truth-about-inequality-in-new-zealand|title= The truth about inequality in New Zealand|website=Stuff |date= 17 January 2017|language= en|access-date= 1 November 2019 | quote = The wealthiest 20 per cent of households in New Zealand hold 70 per cent of the wealth, while the top 10 per cent hold half the wealth.}} the lack of affordable housing is a critical issue. Since the Great Recession, the rapid growth in house prices has spawned an affordable housing crisis{{cn|date=March 2021}} and housing has been a prominent issue on political agendas since 2013.{{cn|date=March 2021}} Despite a number of policy interventions to address the crisis, prices have continued to grow across the country. As shown below, real house-prices increased almost three-fold between 2000 and 2018.OECD Economic Surveys: New Zealand 2019{{Graph:Chart

| width=600

| height=200

| xAxisTitle=Year

| yAxisTitle=House price index (2000 = 100)

| type=rect

| x=2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,2012,2013,2014,2015,2016,2017,2018

| y=100,97,101,116,142,157,172,188,189,165,175,167,171,183,196,213,236,263,279

}}

While house prices increased almost-continuously from the early 1990s, it was not until 2007 that the media started reporting an affordability crisis.{{Cite news|title=Your views: How to afford a house in New Zealand|date=22 January 2007|work=New Zealand Herald }} Nationwide, property prices increased 80% in real terms between 2002 and 2008.House Prices Unit (2008) Final Report of the House Prices Unit: House Price Increases and Housing In New Zealand. Wellington: Department of the Prime Minister and Cabinet. The Great Recession led to a 10% drop in nominal prices in 2008, however price growth then picked up again significantly and, by 2014, nominal prices in Auckland were 34% higher than the pre-crisis peak.{{Cite journal |last=Murphy |first=L.|date=2015|title=The politics of land supply and affordable housing: Auckland's Housing Accord and Special Housing Areas|journal=Urban Studies |volume=53|issue=12|pages=2530–2547|doi=10.1177/0042098015594574|s2cid=153777950}}

As of 2019, the average house price in New Zealand exceeded NZ$700,000, with average prices in the country's largest city, Auckland, exceeding $1,000,000 in numerous suburbs.{{cite news|url=http://www.stuff.co.nz/business/property/86867469/Blowing-Bubbles-Where-the-housing-bubble-has-blown-up-the-biggest|title=Blowing Bubbles: Where the housing bubble has blown up the biggest|first=Andy |last=Fyers |date=4 December 2016 |work=Stuff.co.nz/Business Day}} The ratio between median house price and median annual household income increased from just over 3.0 in January 2002 to 6.27 in March 2017, with Auckland's figures 4.0 to 9.81 respectively.{{cite web|url=https://www.interest.co.nz/property/house-price-income-multiples|title=Median Multiples – House price-to-income multiple|author=David Chaston|date=11 September 2009|publisher=interest.co.nz}}{{Cite web|url=https://www.rnz.co.nz/news/business/406829/new-zealand-average-house-price-tops-700k-for-first-time|title=New Zealand average house price tops $700k for first time|date=7 January 2020|website=RNZ |language=en-nz|access-date=12 January 2020}}

As of 2021, the average house price in New Zealand exceeded $1,000,000{{Cite web|title=QV House Price Index|url=https://www.qv.co.nz/price-index/|access-date=13 November 2021|website=www.qv.co.nz|language=en}}

In 2017, the Demographia think-tank ranked Auckland's housing market the fourth-most unaffordable in the world—behind Hong Kong, Sydney and Vancouver—with median house prices rising from 6.4 times the median income in 2008 to 10 times in 2017.{{cite news|url=http://www.radionz.co.nz/news/business/322858/housing-in-many-nz-cities-'severely-unaffordable'|title=Housing in many NZ cities 'severely unaffordable'|author=Patrick O'Meara|date=23 January 2017|publisher=RNZ }} Another study carried out in 2016 reported that average house prices in Auckland surpassed those of Sydney.{{cite news|url=http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11628399|title=Home truths: City of expensive sales tops Sydney|author=Andrew Laxon|date=25 September 2016|publisher=New Zealand Herald }} That same year, the International Monetary Fund ranked New Zealand at the top for housing unaffordability in the OECD,{{cite news|url=http://www.newshub.co.nz/home/money/2016/09/no-fix-for-housing-crisis-until-young-and-renters-vote---economist.html|archive-url=https://web.archive.org/web/20170927155557/http://www.newshub.co.nz/home/money/2016/09/no-fix-for-housing-crisis-until-young-and-renters-vote---economist.html|url-status=dead|archive-date=27 September 2017|title=No fix for housing crisis until young and renters vote – economist|author=Dan Satherley|date=1 September 2016|publisher=Newshub }} and has called for taxation of property speculation.{{cite news|url=http://www.stuff.co.nz/business/92365713/imf-says-housing-bubble-could-unsettle-strong-new-zealand-economy|title=IMF says housing bubble could unsettle strong New Zealand economy|author=Hamish Rutherford|date=9 May 2017|publisher=Stuff.co.nz}}

Multiple property owners in New Zealand are not subject to capital gains taxes and can use negative gearing on their properties, making it an attractive investment option.{{cite news |url= https://www.nbr.co.nz/opinion/why-capital-gains-tax-wont-stop-housing-bubble-gs|title=Why a capital gains tax won't stop the housing bubble|first=Geoff |last=Simmons |author-link=Geoff Simmons |date=17 June 2016|work=National Business Review }}{{cite news|url=http://www.stuff.co.nz/national/politics/92551093/labour-to-shut-down-negative-gearing-tax-break-in-crackdown-on-property-investors|title=Labour to shut down 'negative gearing' tax break in crackdown on property investors|first=Vernon |last=Small|date=14 May 2017|work=Sunday Star Times}} Prospective house-buyers, however, accuse property investors of crowding them out.{{cite news |url= http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11628403|title=Are investors crowding first-home buyers out of the market?|date=26 April 2016|work=New Zealand Herald }} When the Tax Working Group reported its findings to Parliament in 2019, a capital gains tax was among its recommendations, only to be shelved after failing to secure enough Parliamentary backing.{{cite news |title='No mandate' for capital gains tax – PM |url=https://www.radionz.co.nz/news/political/387253/no-mandate-for-capital-gains-tax-pm |access-date=17 April 2019 |publisher=Radio New Zealand |date=17 April 2019}}

According to NZ's 2017 register of pecuniary interests,{{cite web|url=https://www.parliament.nz/media/3926/2017-summary-report-final.pdf|title=Register of Pecuniary and Other Specified Interests of Members of Parliament: Summary of annual returns as at 31 January 2017|author=Sir Maarten Wevers|date=31 January 2017|publisher=New Zealand Parliament}} New Zealand's 120 members of parliament own more than 300 properties between them,{{cite news|url=http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11852466|title=MPs' latest home ownership, interests revealed|author=Nicholas Jones and Isaac Davison|date=9 May 2017|publisher=New Zealand Herald }}{{cite news|url=http://www.stuff.co.nz/national/politics/92409698/the-many-houses-of-our-mps--which-mps-have-a-stake-in-multiple-properties|title=The many houses of our MPs – which MPs have a stake in multiple properties?|author=Stacey Kirk and Andy Fyers|date=10 May 2017|publisher=Stuff.co.nz}}{{cite news|url=http://www.radionz.co.nz/news/political/330459/government-mps'-property-ownership-revealed|title=Government MPs' property ownership revealed|date=10 May 2017|publisher=RNZ News }} prompting accusations of conflict of interest.{{cite news|url=http://www.radionz.co.nz/news/political/273287/mps'-housing-investments-'no-conflict'|title=MPs' housing investments 'no conflict'|date=11 May 2015|publisher=RNZ News }}

NIMBY sentiment among established home-owners—particularly towards attempts to relax building density rules in Auckland such as the Unitary Plan{{cite web|url=http://unitaryplan.aucklandcouncil.govt.nz/Pages/Plan/Book.aspx?exhibit=AucklandUnitaryPlan_Print|title=Auckland Unitary Plan|date=15 November 2016|publisher=Auckland Council}}—has also been pointed to as a major factor in the housing bubble.{{cite news|url=http://www.radionz.co.nz/news/national/309600/group-considers-legal-challenge-to-unitary-plan|title=Group considers legal challenge to Unitary Plan|date=28 July 2016|publisher=RNZ News }}{{cite news|url=http://www.stuff.co.nz/auckland/77267520/great-dollops-of-nimbyism-lock-first-home-buyers-out-of-auckland-upzoning-debate|title=Great dollops of nimbyism lock first home buyers out of Auckland upzoning debate|author=Maria Slade|date=25 February 2016|publisher=Auckland Now}}{{cite news|url=https://www.nbr.co.nz/opinion/inevitable-nimby-backlash-begins-gs|title=Unitary Plan: Inevitable NIMBY backlash begins|author=Geoff Simmons|date=29 July 2016|publisher=National Business Review }}{{cite news|url=https://www.stuff.co.nz/business/money/103301580/housing-nz-complex-shows-aucklands-nimby-nightmare-unitary-plan-in-action|title=Housing NZ complex shows Auckland's 'Nimby nightmare' unitary plan in action|author=Rob Stock|date=22 April 2018|publisher=Stuff.co.nz}}{{cite news|url=https://www.stuff.co.nz/national/115181227/hopes-antinimby-announcement-will-help-awful-process-of-building-more-houses-in-wellington|title=Hopes anti-NIMBY announcement will help 'awful' process of building more houses in Wellington|author=Dileepa Fonseka and Joel Maxwell|date=21 August 2019|publisher=Stuff.co.nz}} In response, a YIMBY movement of mostly younger people has emerged to call for actions against housing unaffordability, including upzoning.{{cite news |url=https://www.newshub.co.nz/home/new-zealand/2021/06/meet-the-young-yimbys-fighting-for-auckland-s-affordable-housing-future.html |archive-url=https://web.archive.org/web/20210615123721/https://www.newshub.co.nz/home/new-zealand/2021/06/meet-the-young-yimbys-fighting-for-auckland-s-affordable-housing-future.html |url-status=dead |archive-date=15 June 2021 |title=Meet the young YIMBYS fighting for Auckland's affordable housing future |author=Scott Palmer & Melissa Tapper |date=2021-06-07 |publisher=Newshub }}{{cite news |url=https://www.stuff.co.nz/business/opinion-analysis/125556655/the-yimbys-just-flexed-their-muscles-on-density-and-did-not-lose |title=The Yimbys just flexed their muscles on density, and did not lose |author=Dileepa Fonseka |date=2021-06-26 |publisher=Stuff }}{{cite news |url=https://www.stuff.co.nz/environment/climate-news/126176031/life-in-a-vertical-neighbourhood--the-housing-young-buyers-covet |title=Life in a 'vertical neighbourhood' — the housing young buyers covet

|author=Ethan Te Ora |date=2021-09-22 |publisher=Stuff }}{{cite news |url=https://www.nzherald.co.nz/business/hamish-fletcher-be-a-yimby-and-say-yes-to-housing-development/TH7G7ER2YKHRXFVMTSCVHPTT6A/ |title=Hamish Fletcher: I'm a Yimby and proud |author=Hamish Fletcher |date=2018-01-21 |publisher=New Zealand Herald }}

In late 2021, it was reported by property data company Valocity that over 22,100 homes were owned by "mega-landlords" who owned more than 20 properties each, as part of a trend towards further concentration of the housing market by investors.{{cite news |url=https://www.stuff.co.nz/life-style/homed/housing-affordability/300415265/mega-landlords-over-22100-homes-owned-by-small-group-of-very-large-investors |title=Mega Landlords: Over 22,100 homes owned by small group of very large investors |author=Geraden Cann |date=2021-11-28 |publisher=Stuff }}

File:NZ regional average price change 2014 2019.png

{{See also|Homelessness in New Zealand}}

Unaffordable housing has produced profound impacts on New Zealand society. Between 1986 and 2013, home ownership dropped from 74% to 65%.Statistics New Zealand (2015). Dwelling and tenure type tables for Auckland from 2013 Census.

The most recent statistics on homelessness, from the 2013 Census, showed that 1% of the population were living in severe housing deprivation. Of this population 71% are temporarily resident in severely crowded private dwellings, 19% live in commercial dwellings or marae, and 10% live on the street or in a car.{{Cite web|url=https://www.otago.ac.nz/news/news/otago613529.html|title=3 June 2016, Homelessness accelerates between censuses|last=Otago|first=University of|website=University of Otago|language=en-nz|access-date=1 November 2019}} Between 2017 and 2019, the waiting list for public housing doubled, reaching a record 12,500 in August 2019.{{Cite web|url=https://www.stuff.co.nz/national/politics/115412063/public-housing-waitlist-at-new-high-with-12644-households-waiting-months-for-housing|title=Public housing waitlist at new high with 12,644 households waiting months for housing|website=Stuff |date=30 August 2019|language=en|access-date=1 November 2019}} In 2018, a report found that emergency housing providers were turning away 80–90% of those seeking assistance.{{Cite news |last=Cheng |first=Derek |date=11 February 2018 |title=Homeless crisis: 80 per cent to 90 per cent of homeless people turned away from emergency housing |language=en-NZ |newspaper=The New Zealand Herald |url=https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11992371 |access-date=1 November 2019 |issn=1170-0777}}

{{Bar chart

| title = Public housing waitlist
{{small|Source: Ministry for Social Development/Ministry for Housing and Urban Development}}

| label_type = Year

| data_type = Eligible families and individuals waiting for public housing

| data_max = 20,000

| label3 = Sep-14 | data3 = 4,189

| label4 = Sep-15 | data4 = 3,399

| label5 = Sep-16 | data5 = 4,602

| label6 = Sep-17 | data6 = 5,844

| label7 = Sep-18 | data7 = 9,546

| label8 = Sep-19 | data8 = 13,966

|data9=21,415|label9=Sep-20|label10=Sep-21|data10=24,546|label11=Sep-22|data11=24,996|label12=Sep-23|data12=25,284}}

The substantial growth of property prices over recent decades has significantly influenced the distribution of wealth in New Zealand. The 2019 National Business Review Rich List showed that eight of the top 25 wealthiest people made their money from property, and 16 of the 20 new additions to the list also became wealthy through property investment.{{cite news |url=https://www.nbr.co.nz/nbr-rich-list/nbr-rich-list-2019-why-property-is-still-king/ |title=NBR Rich List 2019: Why property is still king |author=Owen Poland |date=2019-08-15 |publisher=National Business Review }} Rising prices have been attributed to various factors including deregulation, mass immigration and politics, with considerable debate over how to address the issue due to its large size relative to the economy.

The Loafers Lodge fire in May 2023, where five people died and 20 were injured, further increased scrutiny on the housing crisis' effects.{{cite news |url=https://www.abc.net.au/news/2023-05-18/wellington-hostel-fire-loafers-lodge-reveals-nz-housing-crisis/102356108 |title=Loafers Lodge residents reveal poor conditions inside Wellington hostel, as police pursue arson investigation |author=Emily Clark |date=2023-05-18 |publisher=ABC News }}{{cite news |url=https://www.rnz.co.nz/programmes/the-detail/story/2018891537/loafers-lodge-and-the-lessons-for-higher-density-housing |title=Loafers Lodge and the lessons for higher density housing |author=Tom Kitchin |date=2023-05-25 |publisher=RNZ News }}

Policies to address the housing affordability crisis cover land use and planning regulation, state housing provision, rules on ownership and investment, and financial regulation.

In 2013, the government passed the Housing Accord and Special Housing Areas Act 2013, introducing Special Housing Areas (SHAs) to increase land supply in urban areas. Within designated SHAs, developments larger than 14 dwellings were required to allocate 10% of housing at 'affordable' prices. Affordability was defined as 75% of the region's median house price, or a price at which households earning up to 120% of median household income would spend no more than 30% of gross income on rent or mortgage repayments. Research showed that little evidence for the effectiveness of this policy to improve affordability.{{Cite journal|last1=Fernandez|first1=Mario A.|last2=Sánchez|first2=Gonzalo E.|last3=Bucaram|first3=Santiago|date=16 March 2019|title=Price effects of the special housing areas in Auckland|journal=New Zealand Economic Papers|volume=55|pages=141–154|doi=10.1080/00779954.2019.1588916|s2cid=169218303|issn=0077-9954}} The act was not extended beyond 2019, after generating disappointing results.{{Cite web|url=https://www.stuff.co.nz/national/politics/111223329/government-will-not-extend-special-housing-areas-law-beyond-september|title=Government will not extend special housing areas law beyond September|website=Stuff |date=12 March 2019|language=en|access-date=1 November 2019}}

From 2016, the housing development planned by Fletcher Building on a designated Special Housing Area at Ihumātao was opposed by protesters, who set up a camp at the site. Opponents contended that the land was confiscated during the Waikato War in 1863, in breach of the Treaty of Waitangi. In 2017 the United Nations recommended that the New Zealand Government review the designation of Ihumātao as a Special Housing Area, drawing attention to potential breaches of human rights.{{Cite web|url=https://www.auckland.ac.nz/en/news/2019/08/12/ihumatao-breaching-human-rights-obligations.html|title=Ihumātao: NZ breaching human rights obligations – The University of Auckland|website=www.auckland.ac.nz|access-date=1 November 2019}} In 2019, after protestors were served an eviction notice and police presence escalated, the prime minister announced that no development would take place at Ihumātao while the government attempted to broker a solution.{{Cite web|url=https://www.odt.co.nz/news/national/rnz/pm-blocks-building-ihumatao|title=PM blocks building at Ihumatao|date=26 July 2019|website=Otago Daily Times |language=en|access-date=1 November 2019}}

In October 2015 the government introduced a bright-line test to reduce speculative investment. This test applies to all property acquired after the law was introduced, and taxes capital gains at the same level as the seller's income tax rate.{{Cite web|url=https://www.rnz.co.nz/news/political/273847/govt-to-tighten-tax-on-capital-gains|title=Govt to tighten tax on capital gains|date=17 May 2015|website=RNZ |language=en-nz|access-date=1 November 2019}}

The loan-to-value ratio measures how much a bank lends for a property, compared to the property's total value. Loan-to-value (LVR) restrictions were first introduced in 2013 by the Reserve Bank of New Zealand. The restrictions comprised a 'speed limit' on the proportion of high-LVR loans that banks can issue, and a threshold defining high-LVR loans.{{Cite web|url=https://www.rbnz.govt.nz/faqs/loan-to-value-ratio-restrictions-faqs|title=Loan-to-value ratio restrictions FAQs – Reserve Bank of New Zealand|website=www.rbnz.govt.nz|access-date=1 November 2019}}

Initial LVR restrictions in October 2013 restricted banks to no more than 10% of loans beyond 80% LVR. In 2015, the restrictions were revised to target price inflation in Auckland, easing the restrictions to 15% over 80% LVR for non-Auckland loans, and increasing to 5% over 70% LVR for investor purchases in Auckland. In 2016 the restrictions tightened further on Auckland investors, to 5% over 60% LVR.

Since 2018, LVR restrictions gradually reduced to 20% over 80% for owner-occupiers, and 5% over 70% for investors. In April 2020 the Reserve Bank lifted restrictions on mortgage borrowing in response to the COVID-19 pandemic, to ensure that the LVR rules did not unduly affect lenders or borrowers as part of the mortgage deferral scheme introduced in response to the pandemic.{{Cite web|title=Reserve Bank removes LVR restrictions for 12 months – Reserve Bank of New Zealand|url=https://www.rbnz.govt.nz/news/2020/04/reserve-bank-removes-lvr-restrictions-for-12-months|website=www.rbnz.govt.nz|access-date=25 May 2020}}

The Reserve Bank has suggested that the targeted restriction for Auckland properties in 2015 may have contributed to price inflation in other regions.{{Cite web|url=https://www.interest.co.nz/property/99810/reserve-bank-has-undertaken-review-loan-value-ratio-lvr-restrictions-and-found-they|title=The Reserve Bank has undertaken a review of the loan to value ratio (LVR) restrictions and found they have been effective in improving financial stability but have 'an efficiency cost'|date=22 May 2019|website=interest.co.nz|access-date=1 November 2019}}

The NPS-UDC is planned to be replaced by the National Policy Statement on Urban Development (NPS-UD), which the government consulted on in 2019.

The purpose of the NPS-UDC, introduced in 2016, was to ensure that sufficient development capacity was provided by local authorities, to meet demand for land for housing and commercial use. The NPS-UDC provided targeted measures for high-growth areas.

In August 2018 the New Zealand Parliament passed a law to ban non-resident foreigners from buying existing homes,{{Cite news|url= https://uk.reuters.com/article/us-newzealand-politics-housing-idUKKBN1L00KO|archive-url= https://web.archive.org/web/20190403042409/https://uk.reuters.com/article/us-newzealand-politics-housing-idUKKBN1L00KO|url-status= dead|archive-date= 3 April 2019|title= New Zealand passes ban on foreign homebuyers into law|date= 15 August 2018|work= Reuters|access-date= 1 November 2019|language= en}} delivering on a New Zealand First Party's election promise. The law allows non-residents to own up to 60% of units in new-build apartment blocks, however, they are not permitted to buy existing homes. Immigration remained a topic of controversy in regard to housing affordability; the Reserve Bank and others cited immigration as a factor in rising house-prices.{{cn|date=March 2021}} Annual net migration as of 2017 was approximately 70,000, compared with an average of 15,000 in the previous 25 years.{{cite news|url= http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11804750|title= Three things that could burst bubble|author= Mark Lister|date= 21 February 2017|publisher=New Zealand Herald }}{{cite news|url= http://www.stuff.co.nz/business/89854233/net-migration-hits-71000-as-kiwis-turn-their-back-on-living-overseas|title= Net migration hits 71,000 as Kiwis turn their back on living overseas|author= Hamish Rutherford|date= 27 February 2017|publisher= Stuff.co.nz/Business Day}} However the Ministry of Business, Innovation and Employment refuted this emphasis, saying that New Zealanders returning from overseas make up much of the inflows, and that there was a need to allow in "skilled migrants required to ramp up housing supply".{{cite news|url= http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11691145|title= Migrants not to blame for Auckland's house prices, study finds|author= Isaac Davidson|date= 10 August 2016|publisher=New Zealand Herald }} In 2016 it was reported that Auckland had over 33,000 "ghost" properties that were registered as unoccupied, many of them believed to be owned by absentee foreigners.{{cite news|url= https://www.noted.co.nz/money/money-property/running-on-empty-the-ghost-homes-in-aucklands-housing-crisis|title= Running on empty: The 'ghost homes' in Auckland's housing crisis|author= Joanna Wane|date= 17 September 2017|publisher= Metro Magazine}}{{Cite web|last=Gibson|first=Anne|date=12 June 2016|title=Rise of the ghost homes – More than 33,000 Auckland dwellings officially classified empty|url=https://www.nzherald.co.nz/business/rise-of-the-ghost-homes-more-than-33000-auckland-dwellings-officially-classified-empty/3JXSEQNUK36SBG7UBQMJ3VUPGU/}}

The bright-line test introduced under the previous administration was extended to five years, to reduce incentives for speculative investment in property. The five-year rule applies to properties purchased after March 2018, and the main family home is exempt.{{Cite web|url= https://nzlaw.co.nz/news/bright-line-test-period-extended/|title= Bright-line test period extended{{!}} NZ LAW|website= nzlaw.co.nz|access-date= 1 November 2019}} Changes in legal ownership for a property can count as a disposal, and can "reset the clock" on the five-year limit, even if the property is substantively owned and controlled by the same person.{{Cite news|url= https://www.nzherald.co.nz/hawkes-bay-today/business/news/article.cfm?c_id=1503458&objectid=12120519|title= Tax matters : Beware the bright line property test|newspaper=The New Zealand Herald |date= 10 September 2018|access-date= 1 November 2019|language= en-NZ|issn= 1170-0777}}

In December 2017 the Labour-NZ First-Green coalition government stopped the sale of Housing New Zealand properties,{{Cite web|url= https://www.stuff.co.nz/national/politics/100039478/government-announces-end-to-state-home-sell-off |title= Government announces end to state home selloff |website=Stuff |date= 20 December 2017 |language= en|access-date= 8 January 2020}} and committed to expanding the supply of public housing.

KiwiBuild, the flagship housing policy of the New Zealand Labour Party, proposed to deliver 100,000 houses in ten years to address the affordability crisis. The scheme planned to boost housing supply by giving property developers more incentives to deliver affordable homes rapidly. This included the Land for Housing programme, which acquired vacant land, on-selling to developers, with conditions of making 20% of dwellings available for public housing and delivering 40% "affordable" housing according to KiwiBuild criteria. The scheme also purchased properties off-the-plans from developers, to sell to eligible buyers.{{Cite web|url= https://www.kiwibuild.govt.nz/about/development-partners/information-for-property-developers|title= Information for property developers {{!}} KiwiBuild|website= www.kiwibuild.govt.nz|access-date= 1 November 2019}} The government was concerned about construction-sector capacity to deliver KiwiBuild's targets, so the KiwiBuild Shortage List was introduced, allowing accredited construction employers to accelerate the immigration process for construction workers.{{Cite web|url= https://nzil.co.nz/kiwibuild-visa-replaced-with-new-kiwibuild-skills-shortage-list/|title= Kiwibuild visa replaced with new Kiwibuild skills shortage list|last= admin|date= 28 June 2018|website= NZ Immigration Law|language= en-US|access-date= 1 November 2019}}

Criticism of the policy highlighted that the prices of KiwiBuild homes remained out of reach for many, with "affordable" properties costing upward of NZD$500,000 in Auckland, and NZD$300,000–500,000 across the rest of the country.{{Cite news|url= https://www.newshub.co.nz/home/politics/2018/02/doubts-over-kiwibuild-s-affordability.html|archive-url= https://web.archive.org/web/20180225094020/http://www.newshub.co.nz/home/politics/2018/02/doubts-over-kiwibuild-s-affordability.html|url-status= dead|archive-date= 25 February 2018|title= Doubts over KiwiBuild's affordability|date= 25 February 2018|work=Newshub |access-date= 1 November 2019|language= en}} By September 2019 the scheme had delivered only 258 houses – well below the targets.{{Cite news|url= https://www.newshub.co.nz/home/politics/2019/09/labour-s-flagship-policy-where-did-kiwibuild-go-wrong.html|archive-url= https://web.archive.org/web/20191030211119/https://www.newshub.co.nz/home/politics/2019/09/labour-s-flagship-policy-where-did-kiwibuild-go-wrong.html|url-status= dead|archive-date= 30 October 2019|title= Labour's flagship policy: Where did KiwiBuild go wrong?|date= 9 April 2019|work=Newshub |access-date= 1 November 2019|language= en}} The uptake also showed that the Kiwibuild homes did not attract buyers, with unsold homes released onto the private market in some regions.

A "reset" of KiwiBuild was released in 2019, following the reshuffle of ministerial responsibilities for housing and appointment of Dr. Megan Woods as Minister for Housing.{{Cite web|url= https://www.stuff.co.nz/national/politics/113821469/pm-takes-housing-off-phil-twyford-in-first-major-reshuffle|title= PM takes housing off Phil Twyford in first major reshuffle|website=Stuff |date= 27 June 2019|language= en|access-date= 1 November 2019}} The revised policy dropped the target to build 100,000 houses in ten years and introduced rent-to-buy and shared-equity options to improve affordability. The requirement for first-home buyers to hold their Kiwibuild homes for at least three years was reduced to one year.

The NPS-UD was consulted on{{by whom?|date=March 2021}} in October 2019, to replace and expand on the 2016 NPS-UDC. The NPS-UD has a similar purpose to its predecessor, to enable growth in new areas by removing unnecessary restrictions, targeted to high-growth areas.

The discussion document{{cite web | url=https://www.mfe.govt.nz/publications/towns-and-cities/planning-successful-cities-discussion-document-proposed-national | title=Planning for successful cities: A discussion document on a proposed National Policy Statement on Urban Development | date=August 2019 }} included a range of requirements for councils, including:

• new objectives for Future Development Strategies, to ensure that growth is coordinated and responsive to demand
• allowing growth through intensification and greenfield development, in a way that contributes to a quality urban environment
• developing and maintaining an evidence base on demand and prices for housing and land
• ensuring the co-ordination of planning across urban areas, taking into account issues of concern for iwi and hapū

The NPS-UD was planned{{by whom?|date=March 2021}} for implementation by mid-2020.

In 2020, the Labour Party won a parliamentary majority; in 2021, the new government announced that it planned to repeal the Resource Management Act and to replace it with three separate planning acts:{{cite news|url= https://www.nzherald.co.nz/nz/government-confirms-it-will-scrap-resource-management-act-create-three-new-acts/AGC55DLIT2DITCZOBPQBU5JGZI/|title= Government confirms it will scrap Resource Management Act, create three new acts|author= Jamie Morton|date= 10 February 2021|publisher= New Zealand Herald}}{{cite news|url= https://www.stuff.co.nz/national/politics/124195642/rma-to-be-scrapped-environment-minister-explains-new-threelaw-plan|title= RMA to be scrapped, Environment Minister explains new three-law plan|date= 10 February 2021|publisher= Stuff}}

• the Natural and Built Environments Act, focused on land use and environmental regulation
• the Strategic Planning Act, pulling together laws around development
• the Climate Change Adaptation Act, focused on managed retreat and its funding

The law changes were announced by Environment Minister David Parker following a 2020 high-level independent review into the Resource Management Act, which concluded that the Act had failed in its purpose.{{cite news|url= https://www.nzherald.co.nz/nz/govt-ordered-review-calls-to-scrap-resource-management-act/JOI2ZWTKNO3V3CPCPWZMRUA4KY/|title= Govt-ordered review calls to scrap Resource Management Act|author= Jamie Morton|date= 29 July 2020|publisher= New Zealand Herald}}

{{cite news

|url= https://www.stuff.co.nz/national/300068501/scrap-and-replace-the-rma-official-report-to-government-says

|title= Scrap and replace the RMA, official report to Government says

|author= Thomas Coughlan|date= 29 July 2020|publisher= Stuff

}}

The RMA was finally repealed on 16 August, 2023.{{cite news |url=https://www.nzherald.co.nz/nz/politics/government-passes-rma-replacement-bills-ending-30-years-of-rma/EUKOHYGWNNA3TDZYQYRI64446U/ |title=Government passes RMA replacement bills, ending 30 years of RMA |author=Thomas Coughlan |date=2023-08-16 |publisher=New Zealand Herald }}

As housing affordability worsened throughout February 2021, Jacinda Ardern announced that her government had undertaken a significant review of housing policy:{{cite news|title='What it'll take to halt New Zealand's housing crisis – and why LVR, RMA changes will do little to help first-home buyers|author = Matt Burrows |url=https://www.newshub.co.nz/home/new-zealand/2021/02/what-it-ll-take-to-halt-new-zealand-s-housing-crisis-and-why-lvr-rma-changes-will-do-little-to-help-first-home-buyers.html|archive-url=https://web.archive.org/web/20210220195035/https://www.newshub.co.nz/home/new-zealand/2021/02/what-it-ll-take-to-halt-new-zealand-s-housing-crisis-and-why-lvr-rma-changes-will-do-little-to-help-first-home-buyers.html|url-status=dead|archive-date=20 February 2021|date=21 March 2021|publisher=Newshub |access-date=1 April 2021}}{{cite news|title='No silver bullet', but Govt fires plenty at housing crisis|author = Sam Sachdeva |url=https://www.newsroom.co.nz/politics/no-silver-bullet-but-govt-fires-plenty-at-housing-crisis|date=23 March 2021|publisher=Newsroom|access-date=1 April 2021}}{{cite news|title=Higher house price caps would have helped only a few hundred first home buyers|author = Jeremy Couchman |url=https://www.newsroom.co.nz/new-rules-wont-help-the-first-home-buyer|date=25 March 2021|publisher=Newsroom|access-date=1 April 2021}}

• Removal of interest rate tax-deduction.
• Housing Aid cap lifted for first home buyers.
• Allocation of infrastructure funds (named Housing Acceleration Fund) for district councils.
• Extension of the Bright Line Test from five to ten years.

Treasury recommended that the Bright Line Test be extended from five to twenty years, double that than what was eventually implemented. Both Inland Revenue and Treasury urged that the government not abolish the interest rate deduction.{{cite news|title=Govt advised against changing interest deductibility rules; Meanwhile Treasury wanted a 20-year bright-line test and Inland Revenue didn't want a change to the status quo|url=https://www.interest.co.nz/property/109647/treasury-and-inland-revenue-advised-against-changing-interest-deductibility-rules|date=23 March 2021|author = Jenée Tibshraeny|publisher=Interest|access-date=1 April 2021}}

Later in the year, a bipartisan agreement on Medium-Density Residential Standards (MDRS) was drafted and signed by the Labour and National Parties in Parliament to relax urban density rules. The new rules would allow houses up to three storeys to be built in existing areas, without the need for a resource consent.{{cite news |url=https://www.rnz.co.nz/news/political/453824/housing-density-to-increase-across-new-zealand-under-rare-bipartisan-solution |title=Housing density to increase across New Zealand under rare bipartisan solution |date=2021-10-19 |publisher=RNZ News }} Two years later however, the National Party backed out of the agreement, claiming their own housing policy was "more ambitious and allowed discretion and flexibility for councils.".{{cite news |url=https://www.rnz.co.nz/news/national/490887/national-s-backdown-on-bipartisan-housing-accord-a-massive-flip-flop-sepuloni |title=National's backdown on bipartisan housing accord 'a massive flip-flop' - Sepuloni |date=2023-05-29 |publisher=RNZ News }}

There is currently no tax on capital gains from property investment in New Zealand. The bright-line test introduced in 2015 and extended in 2018 aims to tax capital gains on property, however the main family home, estates, or properties sold through relationship settlements are exempt.

In late 2017, the Labour Government established the Tax Working Group, an advisory group to examine improvements to the fairness and balance of the tax system. The group published its report in February 2019, recommending a tax on capital gains that applies to gains and most losses related to all types of land and improvements, except for the main family home.{{Cite web|url=https://taxworkinggroup.govt.nz/resources/future-tax-final-report|title=Future of Tax: Final Report|website=taxworkinggroup.govt.nz|language=en|access-date=1 November 2019}} This tax would apply to rental and second homes, business assets, land and shares. Following robust public and media debate, the government abandoned their plan to introduce the capital gains tax, citing a lack of consensus within government.{{Cite web|url=https://www.stuff.co.nz/business/112010254/government-to-make-statement-on-capital-gains-tax|title=Capital gains tax abandoned by Government|website=Stuff |date=17 April 2019|language=en|access-date=1 November 2019}} The OECD and IMF have issued multiple recommendations for the passage of a capital gains tax.{{cite news|url=https://www.stuff.co.nz/ipad-editors-picks/8755679/OECD-call-for-capital-gains-tax|title=OECD call for capital gains tax|author=James Weir|date=5 June 2013|publisher=BusinessDay}}{{cite news|url=https://www.stuff.co.nz/business/industries/104262446/capital-gains-tax-sensible-and-fair-for-nz-says-oecd-official|title=Capital gains tax 'sensible' and fair for NZ, says OECD official|author=Tom Pullar-Strecker|date=28 May 2018|publisher=Stuff }}{{cite news|url=https://www.rnz.co.nz/news/business/438246/housing-affordability-imf-recommends-capital-gains-tax|title=Housing affordability: IMF recommends capital gains tax|author=Nicholas Pointon|date=12 March 2021|publisher=RNZ News }}{{cite news|url=https://www.stuff.co.nz/national/politics/300251210/capital-gains-tax-on-the-table-to-fix-nzs-broken-housing-market-says-imf|title=Capital gains tax on the table to fix NZ's broken housing market, says IMF|author=Thomas Coughlan|date=12 March 2021|publisher=Stuff}}

Land value taxation has been suggested by a series of commentators, including Dr. Arthur Grimes and Dr. Andrew Coleman,{{Cite web|url=https://www.motu.nz/our-expertise/wellbeing-and-macroeconomics/economic-performance/fiscal-distributional-and-efficiency-impacts-of-land-and-property-taxes/|title=Fiscal, Distributional and Efficiency Impacts of Land and Property Taxes

|date=1 September 2009|website=Motu Economic & Public Policy Research|access-date=19 December 2020}} Dr. Ryan Greenaway-McGrevy,{{Cite web|url=https://www.interest.co.nz/news/89662/auckland-universitys-ryan-greenaway-mcgrevy-extols-virtues-land-tax-how-one-would-hit|title=Auckland University's Ryan Greenaway-McGrevy extols the virtues of a land tax & how one would hit both landbankers and wealthy foreigners buying NZ land|date=4 September 2017|website=interest.co.nz|access-date=8 January 2020}} economist Shamubeel Eaqub and Bernard Hickey.{{Cite web|url=https://www.newsroom.co.nz/2018/03/21/98119?slug=why-a-land-tax-is-the-best-tax-reform|title=Why a land tax is the best tax reform|date=22 March 2018|website=Newsroom|language=en-AU|access-date=8 January 2020}}

In September 2015, the New Zealand Productivity Commission released a comprehensive report on [https://www.treasury.govt.nz/sites/default/files/2024-05/pc-inq-ulh-using-land-for-housing-final-report-v2.pdf Using land for housing], commissioned by the government to review local council processes for providing land for housing, with a focus on fast-growing areas. According to the report, insufficient supply of developable brownfield and greenfield land was a major contributor to house price growth between 2000 and 2015. It proposed reform in a range of areas:

1. Lifting restrictive planning controls in areas with spare capacity on existing infrastructure networks
2. More effective cost-recovery of infrastructure costs
3. Greater use of cost-benefit analysis for land use rules
4. Granting local urban development authorities (UDAs) more power to develop housing
5. Powers for central government to intervene to ensure sufficient development capacity is released, if councils are unable to release land (this was implemented through the 2016 [https://www.mfe.govt.nz/more/towns-and-cities/national-policy-statement-urban-development-capacity National Policy Statement on Urban Development Capacity]).

In 2017 the Reserve Bank of New Zealand published a consultation paper on debt-to-income limits, as a tool to restrict credit growth and mitigate the risk of mortgage defaults during an economic downturn. High levels of private debt present a significant macro-economic risk. It reduces household consumption by diverting a large proportion of income to servicing debts and also makes households vulnerable to economic shocks.{{Cite web|url=http://www.oecd.org/economy/public-finance/Debt-and-macroeconomic-stability.pdf|title=Debt and Macroeconomic Stability|last=OECD|date=2012|website=OECD Economics Department Policy Note No 16|access-date=1 November 2019}}

According to investment manager Brian Gaynor in 2012, a 10% drop in house prices would wipe out $60 billion of New Zealanders' personal wealth, which would exceed the losses from the 1987 sharemarket crash. Steve Keen, one of the few economists to forecast the Great Recession, warned in mid-2017 that New Zealand would be one of many nations to experience a private debt meltdown involving housing, and that "the bubble will burst in the next one to two years".{{cite news|url=http://www.radionz.co.nz/national/programmes/sunday/audio/201845436/steve-keen-the-coming-crash|title=Steve Keen: The coming crash|author=Wallace Chapman|date=28 May 2017|publisher=RNZ }} A report published by Goldman Sachs predicted that New Zealand had a 40% chance of a "housing bust" over the same period.{{cite news|url=http://www.radionz.co.nz/news/business/330910/nz-at-40-percent-risk-of-housing-bust-goldman-sachs|title=NZ at 40% risk of housing bust – Goldman Sachs|date=16 May 2017|publisher=RNZ News }} Financial commentator Bernard Hickey described New Zealand's property market in 2014 as "too big to fail", and supports a deposit insurance scheme in the event of a banking collapse caused by a property crash.{{cite news|url=https://pro.newsroom.co.nz/articles/482-the-problem-of-moral-hazard-in-our-too-big-to-fail-property-market|title=The problem of moral hazard in our 'Too Big To Fail' property market|author=Bernard Hickey|date=28 April 2014|publisher=Newsroom.co.nz}} Later, in 2021, Hickey described New Zealand's economy as "a housing market with bits tacked on".{{cite news |url=https://www.stuff.co.nz/business/opinion-analysis/124385961/new-zealands-economy-is-a-housing-market-with-bits-tacked-on |title=New Zealand's economy is a housing market with bits tacked on |author=Bernard Hickey |date=2021-03-01 |publisher=Stuff }}

The Reserve Bank of New Zealand has estimated that the total value of housing loans has increased from just under $60 billion in 1999 to over $220 billion in 2016.{{cite news|url=http://www.stuff.co.nz/business/property/86784216/blowing-bubbles-who-loses-the-most-when-a-housing-bubble-bursts|title=Blowing Bubbles: Who loses the most when a housing bubble bursts|author=Andy Fyers|date=7 December 2016|publisher=Stuff.co.nz/Business Day}}

In April 2021 the total value of housing loans was estimated to be $307.9 billion, having grown by over $30 billion in the preceding 12 month period.{{Cite web |last=Hargreaves |first=David |date=6 June 2021 |title=A crunch of bank lending figures over the past 20 years shows an ever increasing share of bank-borrowed money is going into houses rather than businesses or agriculture |url=https://www.interest.co.nz/opinion/110678/crunch-bank-lending-figures-over-past-20-years-shows-ever-increasing-share-bank |url-status=live |archive-url=https://web.archive.org/web/20220826191434/https://www.interest.co.nz/opinion/110678/crunch-bank-lending-figures-over-past-20-years-shows-ever-increasing-share-bank |archive-date=26 August 2022 |access-date=9 September 2023 |website=interest.co.nz}}

• Housing in New Zealand
• KiwiBuild
• Real estate bubble
• Taxation in New Zealand
• New Zealand dream – aspirations of owning a property
• The Property Cycle

{{Reflist}}

• [http://www.stuff.co.nz/business/68378529/the-auckland-housing-bubble-and-shades-of-1987 The Auckland housing bubble and shades of 1987]
• [https://businessdesk.co.nz/article/looking-back-the-nz-housing-boom-when-and-how-it-all-began Looking back: The NZ housing boom — when and how it all began]

{{Economy of New Zealand}}

{{Financial bubbles}}

Bubble

Category:Real estate bubbles