WEBVTT - Fixing a broken housing market–Housing Minister Chris Bishop 0:00:03.400 --> 0:00:06.200 Called it, and welcome to this episode of Shared Lunch, 0:00:06.280 --> 0:00:08.160 where we're going to be looking at all things home 0:00:08.200 --> 0:00:11.719 ownership and housing and alt or. We're lucky enough to 0:00:11.720 --> 0:00:14.040 be joined by the Minister of Housing, Chris Bishop. Thanks 0:00:14.040 --> 0:00:14.720 so much for joining us. 0:00:14.800 --> 0:00:16.239 Chris, good to be here. Thanks having me. 0:00:16.480 --> 0:00:18.319 I mentioned to you just before we got started that 0:00:18.600 --> 0:00:20.759 huge number of the people investing on the shares his 0:00:20.800 --> 0:00:24.200 platform investing still for the purpose of home ownership, Like 0:00:24.239 --> 0:00:27.360 it's still a massive story of New Zealanders and it 0:00:27.440 --> 0:00:29.480 is starting to you know, we also know that it's 0:00:29.480 --> 0:00:31.200 feeling more and more out of reach for them. So 0:00:31.400 --> 0:00:33.559 there's lots on that, but we thought a great way 0:00:33.600 --> 0:00:35.919 to start the conversation would be just ask you how, 0:00:36.040 --> 0:00:37.760 you know, do you own a home and what your 0:00:37.760 --> 0:00:38.839 path to home ownership was. 0:00:39.200 --> 0:00:39.600 I do. 0:00:39.720 --> 0:00:42.640 I'm very lucky my wife and I own own a house, 0:00:43.440 --> 0:00:46.720 and you know, really conscious that that's not the experience 0:00:46.720 --> 0:00:49.320 for many people, you know, my age and but below 0:00:49.760 --> 0:00:53.480 just ten forty. So yeah, I mean, I like probably 0:00:53.479 --> 0:00:55.760 a lot of his Islanders, you know, I went to university, 0:00:56.360 --> 0:00:59.160 lived at home for a few years and then went flooding. 0:01:00.640 --> 0:01:03.640 Rented in both Wellington and Auckland for a number of years, 0:01:04.760 --> 0:01:07.600 brought an apartment that was my sort of entry point. 0:01:07.640 --> 0:01:12.400 House prices were a lot lower back in twenty twelve, 0:01:14.440 --> 0:01:16.600 so apartment was an affordable way to get on the 0:01:16.640 --> 0:01:20.920 housing Letterer and then yeah, then moved back to Wellington, 0:01:21.240 --> 0:01:23.760 ran for parliament and brought a house and now we 0:01:23.959 --> 0:01:26.200 run another one. So we've just owned one house, I 0:01:26.200 --> 0:01:28.640 should say, so like many people went from one house 0:01:28.680 --> 0:01:31.040 to another with a very very large mortgage. 0:01:31.600 --> 0:01:33.360 So yep, that's sort of my journey. 0:01:33.600 --> 0:01:36.319 But yeah, very conscious that that's not the experience for 0:01:36.360 --> 0:01:40.200 many people. And part of my big drive in housing 0:01:40.560 --> 0:01:42.520 as Minister of Housing is to make home ownership more 0:01:42.520 --> 0:01:45.440 affordable for people. My agent below and in fed all 0:01:45.520 --> 0:01:49.559 his illinders. So you know, I want many more people 0:01:49.560 --> 0:01:51.400 to have the opportunities that I and other people in 0:01:51.440 --> 0:01:53.520 my very fortunate position been able to enjoy. Yeah. 0:01:53.520 --> 0:01:53.720 Great. 0:01:53.720 --> 0:01:56.480 I also hit a very lucky point in the housing market. Well, 0:01:56.520 --> 0:01:58.960 I think I was about two thousand and fifteen or 0:01:59.000 --> 0:02:01.200 twenty sixteen think, which I think was the end of 0:02:01.200 --> 0:02:04.000 like a ten year flat. Yeah, part for the property market, 0:02:04.040 --> 0:02:05.080 but it still felt like I was. 0:02:07.440 --> 0:02:07.600 Bang. 0:02:07.720 --> 0:02:10.800 Mom and Dad helped, so you know, getting that deposit 0:02:10.840 --> 0:02:14.600 together for the apartment back in twenty twelve was you know, 0:02:14.600 --> 0:02:17.000 it was a real stretch and so you know, beg Mama, 0:02:17.080 --> 0:02:20.799 dad came to the party with a industry loan and 0:02:21.000 --> 0:02:23.720 you know, and that's that's the experience for a lot 0:02:23.720 --> 0:02:25.800 of young people. And we're going to try and change 0:02:25.840 --> 0:02:29.959 that because you know, people should see housing and something 0:02:30.000 --> 0:02:32.200 that they can get into and be able to pull 0:02:32.240 --> 0:02:32.920 together a deposit. 0:02:33.240 --> 0:02:35.160 Yeah, mine was a key re server, which was sort 0:02:35.200 --> 0:02:36.239 of the saving greast together. 0:02:36.800 --> 0:02:38.000 That was part of it as well. 0:02:38.120 --> 0:02:41.120 Yeah. Well, I mean you touched on the prices and 0:02:41.160 --> 0:02:44.000 the change and the affordability. But you're one of the few, 0:02:44.120 --> 0:02:46.280 if not the only, certainly in this position to say 0:02:46.280 --> 0:02:49.640 that house prices need to come down. And that's a 0:02:49.639 --> 0:02:52.760 big call, I think for any politician. But what what 0:02:52.840 --> 0:02:54.960 drove you to that point? And can you specify how 0:02:55.040 --> 0:02:57.120 much or do you have an idea on how much 0:02:57.120 --> 0:02:57.840 they should decrease? 0:02:57.919 --> 0:03:01.680 By Yeah, I mean people sort of quite whipped up saying, 0:03:01.680 --> 0:03:03.639 you know, the housing minister wants house process to fall. 0:03:03.680 --> 0:03:06.760 But it's the natural corollary of saying that housing's two 0:03:07.440 --> 0:03:10.880 is unaffordable, which it demonstrably is and objectively is the case. 0:03:10.919 --> 0:03:17.960 So if, as some politicians say, you think housings unaffordable, 0:03:17.960 --> 0:03:20.200 but you don't want prices to fall, well they're sort 0:03:20.200 --> 0:03:22.680 of hollow words, right, because if something's. 0:03:22.480 --> 0:03:26.160 Unaffordable, you want to be more affordable, and more affordable. 0:03:25.720 --> 0:03:29.160 Means you've got to have you know, house process, we've 0:03:29.160 --> 0:03:31.200 got to have got to come down, and there's a 0:03:31.440 --> 0:03:33.840 you know, there's obviously two ways to make housing more affordable. 0:03:33.840 --> 0:03:38.360 One as price declines and then income growth. And the 0:03:38.400 --> 0:03:39.960 truth is we need both. So we need a much 0:03:40.000 --> 0:03:44.160 more productive economy with rising wages that were wages rise 0:03:44.160 --> 0:03:47.720 faster than inflation and were wages rise faster than house. 0:03:47.480 --> 0:03:49.400 Price growth, so that people can catch up. 0:03:49.480 --> 0:03:53.240 But also you know, at the at the house price level, 0:03:53.240 --> 0:03:55.040 you need them to come down, and over time we 0:03:55.320 --> 0:03:57.840 want to. That's the driving force of the government is 0:03:57.880 --> 0:04:00.640 to make housing more affordable. So to answer question around 0:04:00.720 --> 0:04:05.600 around what and where, you know, a good measure of 0:04:07.080 --> 0:04:10.760 an affordable housing market is where house prices are between 0:04:10.800 --> 0:04:12.880 three and five times average household income. 0:04:14.080 --> 0:04:15.480 That's not the case at the moment. 0:04:15.520 --> 0:04:18.560 You know, Queenstown is an outlier example, but you know 0:04:18.560 --> 0:04:21.479 it's eleven to one Auckland is about nine to one. 0:04:21.640 --> 0:04:23.880 Average is about seven seven and a half eight to 0:04:23.960 --> 0:04:26.280 one In New Zealand. The numbers bounce around a bit 0:04:26.320 --> 0:04:28.560 and depending on what measure you use, but you know, 0:04:29.000 --> 0:04:32.480 by any objective measure, New Zealand house prices are severely 0:04:32.560 --> 0:04:36.320 unaffordable and over the last twenty years we have had 0:04:36.320 --> 0:04:40.159 the fastest house price growth in the OECD in the 0:04:40.200 --> 0:04:42.719 Western world. And you just look at New Zealand and 0:04:42.760 --> 0:04:46.279 you say, we're five million people, not that many. We're 0:04:46.279 --> 0:04:48.960 going to land master size of the United Kingdom, so 0:04:49.080 --> 0:04:52.440 pretty big country actually relative to our population. But we 0:04:52.480 --> 0:04:55.960 have designed a planning system and a funding system for 0:04:55.960 --> 0:05:01.840 infrastructure that makes house prices out of control and it's nuts. 0:05:02.200 --> 0:05:04.680 And that's the driving force of our housing policy is 0:05:05.040 --> 0:05:09.320 rather than tinker around the edges with you know, things 0:05:09.320 --> 0:05:12.039 that kind of feel good but don't actually do a lot, 0:05:12.200 --> 0:05:14.320 the driving force of our housing policies to get to 0:05:14.320 --> 0:05:17.000 grips with the underlying fundamentals, which is about land supply, 0:05:17.400 --> 0:05:21.240 infrastructure funding and incentives on councils to make sure that 0:05:21.279 --> 0:05:24.160 they see housing as a benefit rather than a burden, 0:05:24.200 --> 0:05:26.400 which is what they do too much. 0:05:26.440 --> 0:05:27.160 So at the moment. 0:05:27.760 --> 0:05:31.280 Yeah, so many questions out of what you've just said there, 0:05:31.320 --> 0:05:33.600 but just interested out of that what your thoughts are 0:05:33.640 --> 0:05:36.719 on home ownership in New Zealand You've already touched on. 0:05:36.760 --> 0:05:38.520 You believe people should be able to own their own home, 0:05:38.680 --> 0:05:42.760 So maybe more about as an investment vehicle verse productive 0:05:42.760 --> 0:05:44.880 assets that are more likely to grow incomes and things. 0:05:44.960 --> 0:05:47.120 Yeah, I mean home ownership in Zealand's down to sixty 0:05:47.120 --> 0:05:48.520 three percent so is a record low. 0:05:48.640 --> 0:05:50.000 So we want to improve that. 0:05:50.040 --> 0:05:51.960 You know, we want Zilin to be a property owning 0:05:52.000 --> 0:05:53.839 democracy where people can get a foot on the ladder. 0:05:54.120 --> 0:05:57.200 It's an issue of intergenerational equity. You know, people my 0:05:57.320 --> 0:06:00.520 age and younger. I used to be a young I 0:06:00.520 --> 0:06:02.440 think forty. I'm no longer a young MP of a 0:06:02.440 --> 0:06:04.320 middle asied as an MP. But you know, peat people 0:06:04.400 --> 0:06:05.960 my age and below. You know, they look at a 0:06:05.960 --> 0:06:09.560 housing market and it's unaffordable, as you know and as 0:06:09.560 --> 0:06:10.880 many of the listeners will know. 0:06:11.040 --> 0:06:12.040 So we want to change that. 0:06:13.120 --> 0:06:16.839 And there are lots of reasons for that. There's an 0:06:16.880 --> 0:06:20.720 equity issue around it, particularly a generational issue. There's also 0:06:20.760 --> 0:06:23.800 a ginormous fiscal cost to government out of the housing market. 0:06:23.920 --> 0:06:26.560 So we spend as a government five billion dollars a 0:06:26.680 --> 0:06:30.440 year on housing subsidies across accommodation supplement, income related rents, 0:06:30.440 --> 0:06:34.120 emergency housing, the whole range of other housing products. It's 0:06:34.160 --> 0:06:36.720 a ginormous fiscal cost for government. And of course all 0:06:36.720 --> 0:06:39.640 of that money is money that we can't spend on 0:06:39.680 --> 0:06:41.920 the police, on the health system, on the education system, 0:06:41.920 --> 0:06:45.040 things like that, because the housing market dysfunctional. So government 0:06:45.120 --> 0:06:48.400 money just ends up chasing the housing market and filling 0:06:48.440 --> 0:06:52.640 in the blanks and trying to fix up regulatory errors 0:06:52.640 --> 0:06:54.360 that have been made through the planning system and the 0:06:54.400 --> 0:07:01.400 infrastructure funding system. So it's a ginormous cative effect for government. 0:07:02.000 --> 0:07:04.520 And then and then there are just the productivity benefits 0:07:04.560 --> 0:07:10.400 of more housing. So what's really clear is cities, cities 0:07:10.440 --> 0:07:14.520 that grow are engines of productivity and engines of economic growth. 0:07:14.600 --> 0:07:16.640 And that's the big thing New Zealand needs. We need 0:07:16.680 --> 0:07:20.640 more productivity, we need economic growth. And one of the 0:07:20.680 --> 0:07:22.800 things I constantly say, and I'm on a bit of 0:07:22.800 --> 0:07:27.320 a persuasion campaign around, you know, in public life, is 0:07:27.320 --> 0:07:29.120 to persuade people one of the single best things we 0:07:29.160 --> 0:07:32.000 can do to get the economy going and get productivity 0:07:32.040 --> 0:07:33.880 up in New Zealand is to fix our housing market. 0:07:34.560 --> 0:07:36.560 And part of that goes to your point, which is 0:07:38.600 --> 0:07:42.440 making sure that people don't just see the housing market 0:07:42.520 --> 0:07:46.360 as this giant vehicle for capital gains where they can 0:07:46.400 --> 0:07:48.560 just shovel as much money into the housing market as 0:07:48.560 --> 0:07:53.960 possible into second properties and third properties and see massive 0:07:54.320 --> 0:07:58.440 capital gains and sit on those but you know, investing 0:07:58.480 --> 0:08:03.280 in productive New Zealand businesses, you know, in the real 0:08:03.320 --> 0:08:07.240 economy rather than the housing market economy. And so again, 0:08:07.520 --> 0:08:10.640 fixing the underlying fundamentals of the housing market will rebalance 0:08:10.680 --> 0:08:14.360 the economy. And so there's multiple reasons to solve housing 0:08:15.080 --> 0:08:16.840 and you know it's we're very fixated on it. 0:08:17.120 --> 0:08:19.240 Yeah, most where doesn't know the housing market with a 0:08:19.280 --> 0:08:20.040 bits tacked on. 0:08:20.360 --> 0:08:21.760 I think I might have been just INDERI said that. 0:08:23.480 --> 0:08:25.640 You would hear me say this very often, but you 0:08:25.640 --> 0:08:27.680 know it's not it's not. It's not the world's most 0:08:27.720 --> 0:08:28.600 unfair comedy, right. 0:08:28.720 --> 0:08:30.960 Yeah, I'm interested to see what this sort of market 0:08:31.040 --> 0:08:33.520 dynamic with interest rates changing very quickly in another direction 0:08:34.040 --> 0:08:37.480 after a very long bullish run, boyd by lots of 0:08:37.520 --> 0:08:40.959 reasons which could continue. But I still really really am 0:08:40.960 --> 0:08:44.280 passionate about people being able to invest in their own home, sorry, 0:08:44.280 --> 0:08:46.320 buy their own home. And I also think it's an 0:08:46.360 --> 0:08:49.600 amazing creator of wealth for people over time in a 0:08:49.640 --> 0:08:53.319 generational aspect for all sorts of communities, but probably more 0:08:53.360 --> 0:08:57.400 than anything for for for people who are making money 0:08:57.400 --> 0:09:00.720 out of housing. Is New Zealand has very default rates 0:09:00.720 --> 0:09:02.520 on mortgages and home loans, so it's just like this 0:09:02.600 --> 0:09:06.920 compulsory savings plan over and over again, which sort of 0:09:07.640 --> 0:09:09.640 leads me into my next question, which is thinking about 0:09:10.840 --> 0:09:14.240 how you sort of mentioned the economy around this, how 0:09:14.280 --> 0:09:16.560 it's gone. You know, it's gone decades as far as 0:09:16.600 --> 0:09:19.120 a problem the housing aspect of New Zealand. Do you 0:09:19.120 --> 0:09:21.400 think there's any way we could look at this in 0:09:21.480 --> 0:09:24.400 any sort of single mandate mindset where we can see 0:09:24.400 --> 0:09:28.319 continuation over a longer longer than a sort of parliamentary 0:09:28.440 --> 0:09:32.479 term type investments like the example of read by some commentators. 0:09:32.600 --> 0:09:35.439 Is the Reserve Bank coming into control inflation or is 0:09:35.480 --> 0:09:37.280 there any way that you can see us really working 0:09:37.280 --> 0:09:41.559 together in a Biparsson manna to achieve these outcomes? 0:09:41.760 --> 0:09:44.559 Yeah, I think the prospect of that is actually quite good. 0:09:44.840 --> 0:09:49.400 So the thrust of our housing policy picks up on 0:09:49.440 --> 0:09:54.000 the best of what labor did, so Phil Tweyford and 0:09:54.160 --> 0:09:57.640 the last government back in twenty nineteen twenty pass I 0:09:57.640 --> 0:10:00.520 think called the National Policy Statement on urven Development, which 0:10:00.679 --> 0:10:03.640 is the thing that allows for or essentially mandates councils 0:10:03.640 --> 0:10:06.640 to up zone around train stations and city centers so 0:10:06.760 --> 0:10:11.000 allow more apartments, you know, bigger buildings in city centers, 0:10:11.080 --> 0:10:16.600 metropolitan city centers and around train stations. That, by the way, 0:10:16.720 --> 0:10:22.280 has has had world acclaim and is in the process 0:10:22.280 --> 0:10:26.040 of being implemented in Cross CHURCHUALKND well into other cities. 0:10:26.880 --> 0:10:30.280 So our housing policy picks up on that and doubles 0:10:30.320 --> 0:10:33.040 down on that in a way. So we've announced a 0:10:33.080 --> 0:10:35.400 package which we haven't implemented yet, but announced to package 0:10:35.440 --> 0:10:39.400 where we will go further, so more mixed use zoning 0:10:39.440 --> 0:10:45.880 for example, which is essentially a zoning term for more 0:10:45.920 --> 0:10:48.840 cafes and supermarkets and boutiques and bodegas and things like 0:10:48.880 --> 0:10:51.280 that in and around apartments and places where people want 0:10:51.320 --> 0:10:53.600 to live. So that the way planners view cities is 0:10:54.600 --> 0:10:57.280 you know, you live here, and you work over here 0:10:57.400 --> 0:10:59.920 in the commercial area, and then you know you've got 0:11:00.120 --> 0:11:02.439 industrial area over here, and then you go shopping on 0:11:02.480 --> 0:11:05.440 the weekend or at night over here, and you know, 0:11:05.520 --> 0:11:06.600 never the Twain shall meet. 0:11:07.240 --> 0:11:09.120 Actually, it's not the way people live their lives. It's 0:11:09.160 --> 0:11:10.480 not the way people want to live their lives. 0:11:10.520 --> 0:11:14.160 And so mixed use owning is about liberalizing our planning 0:11:14.200 --> 0:11:17.280 laws to allow people to do more with their own 0:11:17.360 --> 0:11:20.120 property and create more Liverpool cities. So we're going to 0:11:20.160 --> 0:11:22.600 make sure that we're going to mandate that in our 0:11:22.640 --> 0:11:24.880 major cities. We're going to get rid of minimum apartment 0:11:24.920 --> 0:11:28.160 sizes in our cities, which again is a liberalizing effect 0:11:28.160 --> 0:11:30.640 to mean that people who want to build departments of 0:11:30.640 --> 0:11:32.040 certain size can do. So we're going to get rid 0:11:32.040 --> 0:11:35.480 of minimum balcony requirements, for example, balcony requirements. There's a 0:11:35.480 --> 0:11:38.679 study out a few years ago. Balcony requirements add fifty 0:11:38.840 --> 0:11:40.800 to seventy thousand bucks to the cost of an apartment 0:11:40.800 --> 0:11:43.920 in Auckland, so it has you know, if you want 0:11:43.920 --> 0:11:45.760 to have it at a balcony, that's fine, but they shouldn't 0:11:45.760 --> 0:11:46.439 be mandatory. 0:11:47.480 --> 0:11:48.800 I've got a whole piece of work. 0:11:48.679 --> 0:11:51.400 I'm about to kick off around urban design, for example, 0:11:51.440 --> 0:11:56.040 because one of the issues is that councils impose largely 0:11:56.080 --> 0:11:59.959 subjective design requirements on housing, and they're not a week 0:12:00.120 --> 0:12:04.800 of the economic effects of doing those mandatory where they 0:12:05.000 --> 0:12:08.800 they're they're not mandatory, but they become mandatory because what 0:12:08.920 --> 0:12:11.199 happens is the council planner says, oh, be good if 0:12:11.200 --> 0:12:13.160 you could do this to the property, or good if 0:12:13.160 --> 0:12:15.720 you could do that, and the developer you know, or 0:12:15.679 --> 0:12:18.840 whoever's building the house essentially has to do it. Otherwise 0:12:18.840 --> 0:12:20.719 the resource concent doesn't happen, or it happens a lot 0:12:20.720 --> 0:12:23.920 more slowly. So give you an example, a classic example 0:12:23.920 --> 0:12:26.440 that I got told about a few weeks ago. There's 0:12:26.440 --> 0:12:30.240 a social housing developer in Napier who's building social housing 0:12:30.320 --> 0:12:34.480 so you know, not particularly ornate, just affordable housing for 0:12:34.600 --> 0:12:37.040 low income people. The council said, oh, we want you 0:12:37.080 --> 0:12:39.520 to put a Juliette balcony on all of the apartments. Well, 0:12:39.600 --> 0:12:41.960 Juliette balconies are those, you know, I think they're named 0:12:41.960 --> 0:12:44.679 after Romeo and Juliette, like, you know, small little balconies. 0:12:44.840 --> 0:12:46.440 Well, you know, look, do they look great? Yeah? 0:12:46.440 --> 0:12:50.120 Will probably they do. But you know, that's massively raised 0:12:50.160 --> 0:12:52.880 the cost of putting the apartments in, and it means 0:12:52.920 --> 0:12:55.880 the develop the social housing developer can do fewer apartments. 0:12:56.920 --> 0:12:58.560 So that's nuts. You know, you. 0:12:59.080 --> 0:13:03.000 Apartments in Napier don't need Juliet balconies and you shouldn't 0:13:03.000 --> 0:13:04.400 need it. You shouldn't have to put one in to 0:13:04.440 --> 0:13:06.680 get a resource consent. So this is the thing that 0:13:06.720 --> 0:13:09.040 I think, you know, we're trying to grapple with when 0:13:09.040 --> 0:13:11.680 it comes to councils is every time you impose a 0:13:11.720 --> 0:13:13.920 requirement to do a particular thing when it comes to 0:13:14.000 --> 0:13:18.240 a new house, that imposes cost. And we are not 0:13:18.320 --> 0:13:20.000 in a position in New Zealand where we can just 0:13:20.040 --> 0:13:22.079 impose unnecessary, needless. 0:13:21.720 --> 0:13:24.440 Costs on housing. So we're going to get to grips 0:13:24.440 --> 0:13:24.920 with all of that. 0:13:25.000 --> 0:13:28.040 So anyway to go back to where you started, which 0:13:28.080 --> 0:13:32.360 is bipartisanship, we've picked up what labor did and done further. 0:13:33.880 --> 0:13:36.200 We've also picked up on the major thrust of where 0:13:36.200 --> 0:13:38.960 Phil Tweyford was going around land use change generally. So 0:13:40.559 --> 0:13:44.520 I want the ability for cities to grow both up 0:13:44.720 --> 0:13:49.440 in city centers and major suburban hubs, but also out 0:13:49.480 --> 0:13:52.520 at the city fringe as well. And you know, again 0:13:52.880 --> 0:13:56.000 Phil Twyft had started a bit of that stuff, and 0:13:56.040 --> 0:13:58.880 you know, you've got replaced his housing minister and the 0:13:59.200 --> 0:14:01.400 kind of work cease. So we're picking that up again. 0:14:02.360 --> 0:14:04.839 Whether or not labor, the current interation of the Labor Party, 0:14:04.880 --> 0:14:06.720 you know, kind of supports that is kind of over 0:14:06.760 --> 0:14:11.000 to the end. But certainly I think the direction of 0:14:11.040 --> 0:14:16.720 travel is clear, which is that deregulating the housing market 0:14:16.880 --> 0:14:21.160 and liberalizing planning restrictions and planning laws and sorting out 0:14:21.160 --> 0:14:26.120 the infrastructure system is the answer. And there's a study 0:14:26.120 --> 0:14:30.280 out by Ryan McGreevy in a University of Auckland that 0:14:30.320 --> 0:14:33.240 shows that the Auckland Unitry Plan, which has kind of 0:14:33.240 --> 0:14:35.080 started all of the stuff we've just been talking about 0:14:35.120 --> 0:14:39.080 back in twenty sixteen, rents in Auckland are appreciably lower 0:14:39.240 --> 0:14:40.040 as a result. 0:14:39.800 --> 0:14:41.800 Of the building boom caused by the Aukland Unitry Plan. 0:14:42.280 --> 0:14:44.840 So when you allow people to build and you actually 0:14:45.120 --> 0:14:47.640 give them the regulatory conditions where they can do it, 0:14:48.000 --> 0:14:52.120 they go and do it, and developers get involved, and 0:14:52.160 --> 0:14:54.400 you get a housing boom. But we need more of it, 0:14:54.440 --> 0:14:59.480 and we need year after year of sustained house building 0:15:00.000 --> 0:15:02.840 apartments and terraces and duplexes and covetable. 0:15:04.160 --> 0:15:06.680 About my next three questions serce, which is no, don't 0:15:06.680 --> 0:15:08.920 be sorry, that's fantastic. We are seeing a lot about 0:15:08.960 --> 0:15:12.000 the social housing and media and things, and obviously there's 0:15:12.000 --> 0:15:15.120 a real big need for that, but we're you know, 0:15:15.560 --> 0:15:17.720 the Shares's customer base tends to be more focused on 0:15:17.840 --> 0:15:20.200 the people are feeling locked out of the buying of 0:15:20.240 --> 0:15:23.360 the house and some of the comments coming through from 0:15:23.400 --> 0:15:26.560 them sort of those tools are disappearing for them, and like, 0:15:26.680 --> 0:15:28.760 how what would your sort of response be to that 0:15:28.800 --> 0:15:31.800 with regards to what's happening from government specifically into supporting 0:15:31.800 --> 0:15:32.560 people into. 0:15:32.560 --> 0:15:34.720 Yeah, so look, we got rid of the first time grant. 0:15:34.760 --> 0:15:36.080 So the first time Grant. 0:15:36.280 --> 0:15:40.360 Was actually introduced by the last National government and continued 0:15:40.360 --> 0:15:43.400 by Labor that provided for up to ten thousand dollars 0:15:43.440 --> 0:15:46.240 for the purchase of a new house. The average grant 0:15:46.280 --> 0:15:48.520 was five, but you could get up to ten. We 0:15:48.560 --> 0:15:50.200 got rid of it because it was a very expensive 0:15:50.240 --> 0:15:52.960 form of housing support and it didn't really make a difference. 0:15:53.000 --> 0:15:55.560 And there are probably people out there watching who say, well, 0:15:55.600 --> 0:15:58.360 you know, I'd like five grand or ten grand towards 0:15:58.360 --> 0:16:00.840 a deposit, and you know, I don't blame them who wouldn't, 0:16:01.160 --> 0:16:04.320 but you know, on average, it brought forward the purchase 0:16:04.320 --> 0:16:07.240 of a property by about six months, so it didn't 0:16:07.240 --> 0:16:10.200 actually make the difference between people buying a property or 0:16:10.240 --> 0:16:12.080 being able to afford a property or not. It's just 0:16:12.400 --> 0:16:14.200 a bit of free money to help along the way, 0:16:15.240 --> 0:16:18.000 and you know, we've got fiscally constrained times. It's a 0:16:18.040 --> 0:16:22.480 demand side measure as well, so it actually you know, 0:16:22.560 --> 0:16:25.320 on the margins economically, it pushes prices up, so it 0:16:25.360 --> 0:16:27.280 actually works counter to what you're trying to do, which 0:16:27.320 --> 0:16:31.080 has achieved greater supply to lower prices over time. So 0:16:31.160 --> 0:16:32.720 we got rid of that and we put it into 0:16:32.760 --> 0:16:35.720 social housing provision because our viewers, when the waitlist is 0:16:35.760 --> 0:16:38.360 twenty thousand strong for social housing and you've got people 0:16:38.400 --> 0:16:40.960 living in emergency housing, it's a better use of Crown 0:16:41.080 --> 0:16:43.200 resource to fund social housing. 0:16:43.280 --> 0:16:45.200 So we did that. There was quite a tough call. 0:16:45.320 --> 0:16:48.160 Not everyone agreed with it, and I can appreciate that 0:16:48.200 --> 0:16:54.800 people don't necessarily like that. You know that there's lots 0:16:54.840 --> 0:16:57.520 of things you can do and lots of different you know, 0:16:57.600 --> 0:17:01.920 sort of solutions, you know, potential solutions. I just come 0:17:01.960 --> 0:17:05.840 back to the fundamental point, which is driving down land price, 0:17:06.040 --> 0:17:09.840 driving down the cost to build, freeing up planning restrictions, 0:17:10.520 --> 0:17:13.600 making it easier to build over time will reduce the 0:17:13.600 --> 0:17:17.680 cost of housing. Orklamuencry Plan as an example where that 0:17:17.840 --> 0:17:21.280 is taking effect. But you know, over time, I'm really 0:17:21.280 --> 0:17:24.159 confident the economic evidence is on our side that we are. 0:17:24.000 --> 0:17:28.200 Doing the right thing. Social housing. 0:17:28.880 --> 0:17:31.000 You know, we've got a whole piece of work to 0:17:31.040 --> 0:17:33.520 get kind of oil, which is the government owned housing 0:17:33.560 --> 0:17:36.000 corporation focused on its costs. 0:17:36.800 --> 0:17:39.200 I mean, it makes complete sense right that if you 0:17:39.200 --> 0:17:41.080 can play a house for twenty or thirty thousand dollars 0:17:41.160 --> 0:17:45.159 less or more, it's better than receiving the grants. If 0:17:45.160 --> 0:17:47.760 that can be achieved, I think there will be a 0:17:47.800 --> 0:17:48.560 fantastic outcome. 0:17:48.680 --> 0:17:50.760 Yeah, there's a range of things we're looking at, like 0:17:50.800 --> 0:17:54.359 progressive home ownership and what's called shared equity. You know, 0:17:54.400 --> 0:17:56.880 the current government, the last government sorry set up set 0:17:56.960 --> 0:18:00.840 up a whole range of different programs there. We are 0:18:01.680 --> 0:18:04.119 we're having a good look at those. They are quite 0:18:04.119 --> 0:18:08.760 expensive and you know they don't they're not at scale, 0:18:08.960 --> 0:18:11.920 So we're having we're having a look at them and 0:18:12.280 --> 0:18:15.360 seeing what ones work and what ones don't. So not 0:18:15.359 --> 0:18:19.400 not closing the door on those kind of options. But yeah, 0:18:19.440 --> 0:18:22.199 the absolute fundamental thrust is to is to sort out 0:18:22.200 --> 0:18:23.040 the planning system. 0:18:23.160 --> 0:18:23.359 You know. 0:18:23.400 --> 0:18:25.200 On the other side, we've got key we save any 0:18:25.320 --> 0:18:28.280 thoughts on how that could be used in in any 0:18:28.280 --> 0:18:30.280 way with regards to exalerating that process to home. 0:18:30.640 --> 0:18:32.240 Yeah, so we preserved the ability to do that. We 0:18:32.280 --> 0:18:33.800 got rid of the first time grant, but preserved the 0:18:33.800 --> 0:18:37.080 ability for people to use keV sabers to withdraw and 0:18:37.560 --> 0:18:39.159 not intending to change that. 0:18:39.240 --> 0:18:39.560 I mean not. 0:18:39.600 --> 0:18:41.200 You know, I saved a bunch of money in my 0:18:41.240 --> 0:18:43.000 own KEP saver back in the day and withdrew it 0:18:43.480 --> 0:18:45.840 all of it basically and order to get into my 0:18:45.880 --> 0:18:48.760 first time So we're you know, we're of got an 0:18:48.760 --> 0:18:52.240 open mind and relation relation to that. Keep savers are 0:18:52.240 --> 0:18:54.399 really important savings vehicle for a lot of a lot 0:18:54.440 --> 0:18:58.359 of New Zealanders and really growing strongly. So don't have 0:18:58.400 --> 0:19:02.320 any fixed pole scene in relation to changes there, but 0:19:02.440 --> 0:19:04.280 an open mind as to what we can do. 0:19:04.600 --> 0:19:07.119 Final question, because we've got a bunch of vestors and 0:19:07.200 --> 0:19:09.240 whilst I've touched on before that I do not see 0:19:09.240 --> 0:19:13.359 myself as a retail investor into residential property going forward, 0:19:13.400 --> 0:19:16.280 like I do like the idea of investing into funds 0:19:16.280 --> 0:19:19.880 and that type of thing, and where I think all 0:19:19.880 --> 0:19:22.040 we have spoken before about the idea of an housing 0:19:22.080 --> 0:19:24.040 fund to help people into first homes and stuff from 0:19:24.040 --> 0:19:27.679 shares is, but the economics are hard to make that 0:19:27.880 --> 0:19:30.320 stack up. You sort of have this basically, where we 0:19:30.359 --> 0:19:33.679 find the gap is between the deposit need, which effectively 0:19:33.760 --> 0:19:37.640 most residential incomes cover your mortgage, which is normally sixty 0:19:37.840 --> 0:19:40.280 ish percent of whatever that residential property is. Hence the 0:19:40.320 --> 0:19:42.520 mass work as soon as you add that forty percent. 0:19:42.640 --> 0:19:48.359 So you've touched on the shared equat Sorry, yeah, the 0:19:48.359 --> 0:19:51.000