Hawke's Bay Property Investors' Association
An inquiry into housing affordability will be among the first tasks for the Government's Productivity Commission, Finance Minister Bill English announced today.
The inquiry will examine issues around both rental and residential affordability.
"New Zealand experienced a sharp rise in house prices over the past decade, resulting in declines in housing affordability and home ownership rates and large increases in household debt," English said.
"That accumulation of debt has made the New Zealand economy more vulnerable to external shocks like the global financial crisis. It has also most likely contributed to higher interest and exchange rates, raising the cost of capital for businesses and reducing exporters' returns."
The terms of reference for the inquiry note that the last decades rise in house prices has been associated with general declines in affordability and home ownership.
"These declines have contributed to increased demand for rental accommodation and additional pressure on the social housing sector," according to the terms of reference document.
The terms document also outlines the scope of the inquiry.
"The Commission is requested to undertake an inquiry to evaluate the factors influencing the affordability of housing (both rental and owner-occupied housing) and to examine potential opportunities to increase housing affordability."
A number of issues are highlighted for "particular attention, without limitation", including the efficiency of the tax treatment of owner-occupied and rental housing, factors influencing residential construction and changing consumer housing preferences.
English also announced the appointment of Sally Davenport and Graham Scott as commissioners, working alongside New Zealand Productivity Commission chairman Murray Sherwin.
The Housing Affordability report is scheduled for February 1, 2012