New Zealand housing affordability is to be examined as the newly established Productivity Commission releases its first Issues Paper today.
The inquiry aims to examine issues around both rental and owner occupied housing and the ramifications to the wider economy as housing comprises the main share of both household assets and debt.
Commission chairman Murray Sherwin said New Zealand house prices remain significantly higher than they were a decade ago despite some recent falls.
"Overall, there is concern that this trend has been associated with declines in housing affordability. This underpinned the government asking the Commission to evaluate factors influencing housing affordability and to find ways to improve it."
The issues paper is the first step in the Commission's inquiry process and outlines the context for the enquiry, the approach the Commission intends to take and identifies key questions. The Commission will use the paper to help engage with interested parties, from renters and home owners to industry bodies.
Sherwin said the Commission's role is to increase productivity and, as a result, the wellbeing of New Zealanders.
"There is nothing more central to wellbeing for most people than affordable high quality housing. Our first task is to better understand the key drivers of housing affordability and to what extent there are distortions in the housing market. The Commission wants to maximise quality housing options for all New Zealanders, regardless of their income or whether they rent or own."
The inquiry will examine demand and supply factors driving affordability, such as land supply, infrastructure, building costs, Government regulations, taxes and levies, availability of finance and the preferences of New Zealanders.
Submissions close on August 3, 2011 and information on how to make a submission is included in the Issues Paper available at www.productivity.govt.nz.
The Commission is due to release its draft recommendations for improving housing affordability in October this year.
Its final report and recommendations will be presented to Government by February 1, 2012.