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Banks and governments are responsible for housing crisis

Published: Fri 13 Sep 2013 09:23 AM
Banks and the governments are responsible for Auckland Housing Crisis
September 12, 2013
Banks stand to gain billions not just from the rising price of Auckland houses but also from the eventual and inevitable crash, according to New Economics Party spokesperson Deirdre Kent.
“The role of banks is not intermediation but to create credit and control its supply. What that means is that it becomes very easy for banks to start or lead a lending boom even though policy makers might not. Because if they feel that the time is right, they simply expand the money supply. “
She said the banks have started a lending boom in Auckland, rewarding staff for issuing loans.
“When an Auckland accountant tells us it is not uncommon for residential real estate investors to own five, 10, 20, 50, or even 100 houses, we have to worry.
“The Government collaborates by making the interest, insurance, rates and maintenance tax deductible so there is hardly any tax to pay.
“When we have a government and opposition blindly oblivious to the true role of banks, banks are almost in complete charge. A tax policy favouring property investment and making it easy to hold land without financial penalty will see to that.
“The opposition solutions are little better. A capital gains tax doesn’t hold down prices when too weak and just keeps land off the market when it is strong.
She said it can only end in tears.
ends

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