Prime Minister John Key says the Government's plans to ease pressure on the housing market won't bring down prices overnight but gradual change is better for the economy.
The Government will today unveil its response to a Productivity Commission report in April which warned the young, single and low-income earners were being priced out of the market.
Finance Minister Bill English has indicated the reforms will open up more land on urban brownfield land and greenfield sites on the outskirts of cities. It will include changes to local government and resource consent laws.
The announcement is likely to be a bit of a damp squib, with even Mr English admitting National is "being pretty careful . . . I wouldn't get expectations too high".
"The Government is picking up the issue of housing affordability before the market gets overheated and it's likely to mean quite a lot of interaction, maybe some tension with the planners who we believe have quite an impact on the housing market," he said.
Key today told TVNZ's Breakfast programme there would also be no first home-owner schemes, despite him being in favour of them, because the Government didn't want to boost demand for houses before addressing supply issues.
Mr English will outline "a programme of work" for the next six to nine months.
"Some of the stuff we say will be interesting to the planning community because they don't usually see their decisions as having any impact on the supply, or certainly the price, of housing," Mr English said.
He stressed the Government would not be intervening directly to get first-time buyers out of rentals and on to the property ladder.
"Traditionally that's where governments go when they think there is a problem in the housing market . . . the stuff we are going to focus on is the supply side, not the demand side."
The focus would be on speeding up and simplifying planning processes, he said. He acknowledged councils had a "difficult job" in making land available and co-ordinating infrastructure.
And the Government would work with councils to understand how they made decisions and how new legislation could make that easier.
"We don't make the decisions, councils do. But we are affected by their decisions," he said.
"We are working with them . . . we don't see the world the same way," he admitted.
Today's announcement will not address developer contributions to infrastructure, as the Government is awaiting the results of a review.
But Mr English said he saw opportunities in the Government's $15 billion property portfolio. There were likely to be more schemes such as the partnership with Auckland Council in Tamaki, where 156 properties are being redeveloped to create at least 260 new houses.
Labour housing spokeswoman Annette King said the Government would disappoint with its "token tinkering" in the face of a housing crisis. Almost half of young people were renting - compared with 20 per cent in the 1980s, she said.
More homes in the $350,000 to $450,000 price bracket and more social housing should be built, as well as setting quality and efficiency standards for rental properties.
"It seems likely that tomorrow disappointed New Zealanders will ask: is that all," Mrs King said.
Key some of the Government's proposals could be ''quite bold'' such as fast-tracking land to be redeveloped quickly.
It also wanted to ensure infrastructure around new developments was funded so they weren't held back and wanted to work more with building companies, he said.
''There's no one silver bullet. We're not arguing that house prices will fall over night as a result of what we are doing. In fact slow appreciation of houses is quite a good thing. It's when you get these rapid booms up that you then get a credit boom which we had in 2008.''
A FORMULA FOR CHEAPER HOUSES
What the Productivity Commission found:
An immediate release of land for residential development would ease supply constraints and reduce the pressure on prices.
This could be achieved by means of significant tracts of new residential land on the urban fringe (greenfield) and urban land that could be redeveloped (brownfield).
Collaboration with developers would help ensure appropriate land is released, and infrastructure is ready and aligned with market demand.
Councils should ensure their planning policies, such as height controls, boundary setbacks and minimum lot sizes are not frustrating efficient land use.
Councils should review regulatory processes with the aim of speeding up, simplifying and reducing the cost of them. Central government should consider the case for reviewing planning legislation to reduce costs and uncertainty.
Update guidelines on contributions to infrastructure from developers. Building costs are up to 30 per cent greater than in Australia.
Construction industry productivity is flatlining and needs a development strategy.
Housing assistance costs the Government $3 billion a year but the community housing sector is too small and fragmented.
- © Fairfax NZ News
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