House prices have to drop 30% to be affordable

House prices ‘must fall 30%’ to be affordable – Sunday Star-Times – National News

Why does everyone look at the supposed housing affordability crisis ass-backwards. Instead of wanting house prices to drop they should be looking at productivity gains that enable incomes to rise, coupled with significant tax cuts.

But the real kicker for the government comes with Housing Minister Maryan Street admitting that the 500 houses in Hobsonville that were part of the governments huge initiative in affordable housing aren’t really, either part of the plan nor affordable.

Housing Minister Maryan Street says the government recognises its initiatives, such as the 500 homes planned for Hobsonville, near Auckland, are out of reach for average income earners. These are expected to sell for $300,000 to $350,000. Street says even average-income home buyers will need extra help to plug the affordability gap.

That is quite different from her answers in the house over housing affordability

Hon MARYAN STREET (Minister of Housing) : In December the developer A V Jennings was announced as the preferred partner to carry out the first precinct development at Hobsonville. This is the excellent project that aims to create a mixed community of affordable housing, State rentals, and higher-end homes.

and;

Hon MARYAN STREET (Minister of Housing) : Yesterday the Prime Minister outlined an ambitious programme to tackle housing affordability. Critical to it are, first, the development of additional large-scale building projects similar to the Hobsonville and T?maki projects; second, the identification of Crown land for developments; third, the plans to extend the role of the third sector in housing provision; and, fourth, the shared equity scheme, the details of which will be unveiled in July.

Quite a contrast in just a few short months. We have gone from affordable housing in Hobsonville to un-affordable housing in Hobsonville. How embarrassing.

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