Labour lurches more left

Stuff reports:

The only way the Government could create affordable homes was to build them and had a plan to do just that, Shearer said.

This is like reading the old socialist manifestos about nationalising the means of production.

I’m not sure who is writing the words that David Shearer utters, but consider the mind set that the only way you can make something affordable is to have the Government do it.

Then consider where such a mind set ends up.

If only the Government can create affordable houses, why allow the private sector to build any houses at all? Who wants unaffordable houses?

I mean government monopolies have a great track record of affordability, don’t they?

Putting aside the lurch to the left, the economics is woeful also. Look at the four major factors in building a house.

  1. Land
  2. Consenting
  3. Construction
  4. Profit/Return on Capital

Labour is saying that only one of those four things matter. They are ignoring the factors that almost every expert group has said contribute to increasing house prices, and focusing on the one where they can demonise the private sector.

They also miss the point that it is not only about building new houses that are cheaper, but how to reduce houses prices overall. 95% of house buyers will be buying an existing house and section.

Freeing up land supply reduces the cost of land throughout an entire city. It will reduce inflationary pressures on pretty much all houses, except perhaps the most exclusive areas.

Building an extra 10,000 houses without freeing up more land, may (if you even accept their figures) means the lucky few who win the right to get one of those houses will benefit – but it will do nothing for the other 95% of home buyers.

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