QUOTE(wakingdream @ Jan 22 2008, 04:11 AM)
I'm curious about the above. The artificial restrictions part. Artificial restrictions to limit the supply of land zoned for residential, which would inevitably drive prices through the roof, no? Is that to slow down an overly ambitious housing market?
Nah, it's got more to do with keeping urban sprawl under control - Auckland in particular is geographically huge: despite having only 1.3 million or so people it's not much smaller than LA or London.
Don Brash, by the way, is not exactly unbiased here - although the article lists him as "former Reserve Bank chairman" he's more recently "former leader of the National (i,.e conservative) Party & Leader of the Opposition". The whole "excessive government restrictions" thing is a political football he's taking the opportunity to kick around.
I'd say house prices here actually have more to do with tax policy (investment in rental property has massive tax advantages over, for example, the sharemarket) and the long duration of the housing boom making people think rising house prices make them a "sure thing" investment, so they're willing to pay silly money.
Plus NZ house prices aren't actually massively high in absolute terms - "affordability" sucks because our incomes are among the lowest in the developed world. Which means there is also a tendancy for prices to be be driven up by well-off immigrants (or expat Kiwis returning home, which they almost all do eventually).
Be interesting to see how things change over the next year or so - the housing market was already flattening off due to high interest rates, and the US credit crunch will have an effect.