I did another interview this morning with Guyon Espiner on Radio New Zealand’s Morning Report. This was in response to what I thought was a minor spike in rents. This starts with Espiner’s usual assertive questioning, and tapers back.
My Latest Radio NZ Interview
Click here to listen to my interview with Guyon Espiner on today’s Morning Report show:
What is happening to Auckland rents?
For the record, Auckland rents are rising. The reason is that there is a genuine under supply of rental accommodation. We have high net migration from other regions of NZ, solid natural population growth and also strong immigration (from Kiwis coming back from Australia and not departing there as much as they did in the mid and late 2000s).
House prices are rising far faster than rents so this is a real issue.
The solution to rampant house price growth?
There are two sides to this: supply and demand. We have demand restrictions in place, but far more focus needs to be given on the supply side to build more houses.
The property market is governed by the laws of supply and demand. On the supply side we need to increase the volume of buildings actually constructed. On the demand side the Government has made moves to tax property speculators with the bright-line test, and the Reserve Bank of New Zealand has moved to impose LVR restrictions on property investors throughout NZ, and brought in a special rule to have a maximum 70% Loan to Value ratio for property investors proposing to buy or refinance investment properties in the Auckland region (except for 5% of property investment loans).