New Zealand (NZ) house prices are quite high and therefore led to decline in house affordability, stated Murray Sherwin, Chairman, Productivity Commission.

He was concerned that the fall in affordability is due to the price hike. The commission worked on to find out the main factors for this fall in housing market. According to the study, the number of new constructions were 24,000 and 32,000 homes were renovated, but still this number is quite small when compared with other countries and other divisions in NZ economy. The main subject of concern is development contributions and metropolitan urban limits.

According to Sherwin, “The Property Council has been a long-time advocate for changes to the Building Act 2004, the Local Government Act 2002 and local government sector policies to reduce barriers to property ownership in New Zealand and remove complexity, red tape and disincentives for development”.

Also, the young people of NZ do not have means of access to affordable housing supply due to governments restricted land plans and compounding costs of the houses. The growth of the housing is likely to increase from $224 million in
2006/07 to $447 million in 2015/16.

The impact of the cost on the housing affordability is a debatable issue, concluded the Productivity Commission.