A property investment expert has claimed the housing crisis is a myth, and that we've built more than enough homes in the past few decades to keep up with population growth.
Ashley Church's views, expressed on The AM Show on Friday, are at odds with the Government, economists and advocacy groups, which all place the shortage in the tens of thousands.
"If you go back to 1986 and you look at the census, the short answer is we don't [have a crisis]," Church, the former head of the Property Institute of New Zealand, said.
"We've actually built far more houses than we would have required just to stand still. This mantra that we've been parroting since about 2013 is political, not practical. It's not real."
Reports commissioned by the Government in 2017 and 2018 suggested the crisis was very real - particularly in Auckland, which was short by up to 45,000 houses. In June this year, Kiwibank said the shortage was getting worse - around 130,000 nationwide, likely rising to 150,000 next year, despite a recent rise in the number of residential consents being issued.
On Friday, the Salvation Army's latest COVID-19 Social Impact Dashboard was released - they're in no doubt there's a housing crisis, calling it a "giant elephant" and noting there are more than 20,000 people waiting for emergency housing - up 50 percent in a year.
Housing prices in 2020 have defied predictions made early in the COVID-19 crisis, rising up almost 20 percent year-on-year.
"You go to look at places and you're like, 'no way are they going to get $900,000 for this' and it sells for $1.3 million," said wine writer and would-be homeowner Mary Blair, appearing on The AM Show with Church.
"Just going to auctions, having to pay, do so much due diligence, lawyers, you've got to pay for that all before you go to auction... We recently went to an auction and didn't even raise our paddles. We just sat there and I ended up just actually laughing. It just sailed past our absolute limit with people aggressively bidding... I literally just weep quietly into my breakfast. It was beyond tears - I just laughed."
Many have pointed the finger at the Reserve Bank, which has kept interest rates at record lows to stimulate the economy - a side-effect being it's cheaper than it has ever been to borrow and speculate on property.
Church said this has been the real reason for prices going up as far back as the mid-1980s - not a lack of supply.
"The cost of money has come down dramatically, that's fuelled the ability for people to spend more on houses. Essentially, that's probably the 80 or 90 percent driver of house price increases."
The official cash rate in the 1980s was up around 20 percent. While this made servicing a mortgage arguably more difficult, prices compared to incomes were much lower - making it easier to get a deposit together.
In 1991, Statistics NZ data shows there were about 2.64 people per household on average. That has fallen to 2.59 in 2020. Far more people are now renting than in 1991 however, suggesting a higher percentage of homes are owned by investors than in the past - and with more equity, it's often easier for them to get lending to buy more. This could be tamed if the Reserve Bank introduced debt-to-income ratios - something Governor Adrian Orr is considering.
Price inflation 'very good for our country'
Echoing comments he made on The AM Show earlier this month, Church said it was "not necessarily a bad thing" for house prices to go up.
"There's this big focus on what we can do to stop house prices going up, what can we do to slow down house price inflation? It's the wrong question. There's nothing wrong with house price inflation. It's been very good for our country - it's made people wealthy, it's enabled us to start businesses using the equity that we've built in properties.
"The issue that we've got is not about house prices increasing, it's about the victims of that - and it's a subset of first-home buyers. Some first-home buyers have got mum and dad who can assist them, so they're okay... a few of them have to raise the deposit themselves, for whom it's too difficult to get into the market. That's who we should be focusing on."
Economist Shamubeel Eaqub contributed to a housing report commissioned by the Government in 2018 which laid out the sheer scope of the problem, saying it had contributed to soaring rents and "high levels of children's hospitalisations as a result of poor quality housing". Last week on Newshub Nation he said the Reserve Bank was pouring fuel on the housing market fire and "ripping apart the social fabric of New Zealand".
While they agree on the primary cause of the recent surge in prices, Eaqub is squarely in the camp of believing there is a crisis.
"We've got this huge ponzi scheme that is being enabled and encouraged by the Reserve Bank. We can't afford for this to continue."
He said the Government's focus should be on helping renters, as many won't ever have any realistic hope of getting the ladder.
A leading property investor in October said it was demand from first-home buyers that was pushing up prices.
