The Registered Master Builders Association (RMBA) with support from the Construction Strategy Group (CSG) recently commissioned a report to identify the impact of regulation on housing affordability.
The report highlights a number of recurring regulatory challenges that currently can create additional costs of $35,000 to $77,400 on a $567,000 new house in Auckland, with a subsequent increase in mortgage payments of $134,000 to $266,000.“Housing affordability has been on the industry radar for some time now and while land availability is critical and a large component of any future solution, there are many other factors, that when added together, can create an overwhelming financial hurdle for New Zealanders wanting to enter into the new home market” says RMBA CEO David Kelly.
“Home ownership is part of the Kiwi psyche, it’s what most of us aspire to. International studies show that quality affordable housing is a major component of the infrastructure, particularly in larger cities, that creates economic growth and attracts people – it’s important.”
“While we definitely don’t yet have all the answers to fix the issues identified in the report, we want this document to take its place as part of the conversation. RMBA is committed to working with Government and industry on finding solutions using evidence-based information,” says Mr Kelly.
The Chairman of the CSG, Richard Aitken, says that the study does not deal with the ability of home buyers to keep on ratcheting up prices paid for housing in Auckland. “But it does highlight that there are regulatory practices under the control of local and central government that can be tackled to help increase the supply of housing at affordable prices, up to the point where demand pricing sets the market tone. We believe there should be a concerted effort within local and central government to get these regulatory settings right”.
The report was prepared by BRANZ and the executive summary of the document is appended.
Please view the Master Builders report here
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