Auckland housing crisis hurting mortgage-payers and businesses

The Government’s failure to take action on the Auckland housing crisis is keeping interest rates high and hurting households and businesses, the Green Party said today.

“The Reserve Bank’s ability to lower the OCR to help businesses invest and households pay off their mortgages faster is limited by the Government’s inaction with regard to the Auckland housing market,” Green Party co-leader Russel Norman said.

“Auckland’s housing crisis is clearly a drag on the rest of the economy which needs smart green solutions that the Government is ignoring.

“With inflation close to zero you would normally expect the OCR to be cut, but it seems the Reserve Bank is too worried about interest rate cuts further inflating the Auckland housing market.

“It’s good to hear the Reserve Bank Governor hinting that OCR cuts may follow if inflation remains low. That would help households pay off mortgages and businesses invest in growth.

“A capital gains tax (excluding the family home) would help take the heat out of the Auckland housing market, along with restrictions on sales to foreign buyers, increased medium-density housing to meet demand, and a major state house building programme with progressive ownership options.

“We need Government leadership to direct investment to productive sectors of the economy to help businesses grow, instead of incentivising property investment.

“The high Kiwi dollar is hurting our exporters, as shown in this week’s announcement of the highest annual trade deficit since July 2009, $2.4 billion.

“The Green Party believes that a broader perspective is needed on monetary policy, with OCR decisions made by the whole Reserve Bank board including representatives of the tradable sector,” Dr Norman said.

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