Media release
Tuesday, 19 July 2016
Property Institute slams ‘political response’ by Reserve Bank
Property Institute of New Zealand Chief Executive, Ashley Church, is asking the Government to consider removing the
Reserve Bank’s ability to influence housing policy in light of what he describes as ‘a politically motivated response to
house price inflation’.
His comments follow todays Reserve Bank announcement that Property investors will require a 40 per cent deposit to buy
property anywhere in New Zealand from 1 September.
Mr Church says that the announcement is directionless and smacks of political expediency.
“This is essentially a u-turn. Two weeks ago we were told that these measures would be introduced ‘at the end of the
year’. Now they’re suddenly sufficiently serious that they need to be introduced in 6 weeks’ time? What’s changed?”
“Could it be that last week’s serve from the Prime Minister has spurred the Reserve Bank into action?”
Mr Church says that ‘even a whiff’ of political consideration in the Banks announcement undermined the entire basis of
the Reserve Banks role which was to act as an ‘independent referee’ for monetary policy.
“If the Reserve Bank can now be politically influenced it calls into question the entire basis of its existence and the
terms of the Reserve Bank Act”.
“There was a time when the Reserve Bank could be trusted to act above politics, in the best interests of the nation. If
that’s no longer the case – perhaps the Government should consider withdrawing some of the powers it has given the Bank
– or even reviewing the Act”.
Mr Church said today’s announcement would make little difference to house price inflation.
“Many investors will already have close to, or over, 40% equity and this will be little more than a slight speed bump”.
Mr Church repeated earlier calls for the introduction of decisive and broad ranging policies to address the housing
crisis.
“One-off, incremental and politically motivated, announcements won’t cut it. We have a runaway market and a generation
of kids who can’t, now, afford to get into a home of their own. We need a comprehensive set of smart measures that send
a clear signal to private developers, redirect investor activity into the building of new houses, and give our young
people a fighting chance to buy their first home”.
Ends