Mike's Minute: Government still clueless over housing

Author
Mike Hosking,
Publish Date
Tue, 23 Mar 2021, 10:02AM

Mike's Minute: Government still clueless over housing

Author
Mike Hosking,
Publish Date
Tue, 23 Mar 2021, 10:02AM

I assume you're fizzing as much as me, for today is let's fix the housing crisis day.

It started last year when Grant Robertson wrote to Adrian Orr and said, "Adrian these houses, man alive can you believe what's going on?"

Orr put the letter in the bin, but it did allow Robertson to tell us all that he was onto this mess and he had written to the Reserve Bank Governor. Based on the Labour Party philosophy that talking is doing, he was doing.

Then sort of nothing happened until Robertson said he would have more to say on housing. Also, Jacinda Ardern chimed in and said, quite perceptively I think, that prices can't keep going up the way they are.

Interestingly last week Stuff had a chart that showed, unfortunately for Ardern since she said prices can't keep going up the way they are, those naughty prices clearly had not listened and followed the Ardern instructions. Prices kept on going up.

So back to Robertson who had written yet another letter to Orr, this time telling him to take house prices into account when setting the Official Cash Rate. This now meant Orr had to take jobs, inflation, and housing into account. That makes him more a magician than Governor.

But also, Robertson was going to help with a big suite of real estate magic that was going to sort this mess out once and for all.

Unfortunately, I think due to lockdown or some meetings that couldn’t take place, presumably because they don't know how to use Zoom, that announcement was delayed

But today is the day. So, what to expect? Well, the Brightline, obviously. That won't make any difference. The number of investor flippers isn't high and therefore doesn’t affect the market unduly.

The main reason, of course, first timers are getting squeezed is not just because of price, but also the deposit. 20 percent is too much, but that won't get touched today. I hope I am wrong.

HomeStart numbers might get shifted a bit, allowing more people to access it.

But fundamentally, what we already know, especially those of us who have been in housing for decades and seen all this a number of times before, governments don’t shift markets. Short of Robertson personally paying your mortgage, there are no magic bullets.

So, today's great risk is, yet again, they’ve over sold this thing. In opposition, they lampooned the then government over prices, and yet look at their record after four years.

If today fundamentally changes anything, I'll eat my indoor-outdoor flow.