Thursday, November 12, 2020

Empty hand-wringing

This morning, we learned that house prices have risen nearly 20% in the past year, locking more people out of the housing market and further entrenching the growing class divide between those with wealthy parents and those without. And of course, Jacinda Ardern is deeply concerned:

Prime Minister Jacinda Ardern says she wants to ensure first home buyers can get into the market after it was revealed this morning that house prices have increased nearly 20 percent.

House prices have increased 19.8 percent year-on-year with the median now at $725,000.

Ardern this afternoon said figures show an increase in first-time buyers in the market since 2017, but that investors in the market had remained the same.

"Obviously we want to ensure our first home buyers can get into the market that is something that is top of mind for us..."

If only there were some policy levers she could pull that would discourage hoarders and speculators from flooding the property market and crowding out actual people. Oh wait, that's right - they've all ready been taken off the table by... Jacinda Ardern.

Ardern caused this problem. And we deserve more from her on it than empty hand-wringing and sympathetic noises. The problem is that she's deeply invested in it: her Auckland home - worth $1.7 million in mid-2017 - is now likely worth over $2 million, and producing more than a backbench MP's salary in tax-free capital gains every year. Which looks like one hell of a conflict of interest, and perhaps explains her lack of interest in finding any solution.