Anne Gibson at NZ Herald reports:
“If you put a straitjacket around the city and say only land for residential development is in that defined line, you’re gifting a massive capital gain to those rural land owners,” he said, citing a Flat Bush property bought in 1995 for $890,000 and now on the market for $112 million – a situation he called “obscene”.
Land bankers had been encouraged to hold their parcels and strangle supply, the minister said.
“Because they have a monopoly, they are able to make those sorts of profits and the best way to stop it is to actually create a greater degree of freedom,” he said, citing the housing accord between the Government and city council intended to improve housing affordability.
“We cannot walk away from the issue that restrictive land supply policies across the world are at the heart of the housing affordability issue,” Dr Smith said.
Land supply is not the only factor, but it is the major factor. Any approach that fails to deal with land supply will be ineffectual.
“They’ve appreciated in value by approximately 20 per cent a year. The cost of capital is going to be about 8 per cent a year. People will stop land-banking when they think we’ve got our regulatory act together between local and central Government and we’re not going to allow that sort of ongoing monopoly of land supply. The land banker had no incentive to do anything,” Dr Smith said.