Housing affordability is a national emergency, says BNZ chief executive Andrew Thorburn.
Speaking to the Trans-Tasman Business Circle in Auckland this morning, he said New Zealand would not become a wealthier and more productive nation if it could not affordable house its population.
Measures such as increasing land supply would help, he said, but would take time.
“The social and economic consequences for us all will only grow over time if action is not taken.”
But he said New Zealanders had a lot at stake in the property market. If house prices fell by 10%, it would wipe out more wealth than the stockmarket crash of 1987.
Thorburn said almost 50% of BNZ’s lending book was mortgages but he was concerned that lending was weighted towards home loans and away from the productive sector.
He said some of the country’s predilection for housing was because of the tax system. “Under current settings, dividends and savings are taxed at a much higher rate than the effective taxation rate on housing.”
But he said it was wrong to put so much emphasis on lending for houses – even mortgages were generally a safe asset for banks. He said BNZ was focusing on growing its agri and small business clients.