Already high prices have sky-rocketed in the past year or two due to an acute shortage of housing, historically low interest rates and cheap access to capital
WELLINGTON, Oct 19 (Reuters) - New Zealand's government and the opposition party joined forces on Tuesday to agree on plans to speed up the building of homes and cut red tape, in an effort to tackle the country's housing crisis.
Homes in New Zealand are the most unaffordable among Organisation for Economic Co-operation and Development (OECD)nations. Already high prices have sky-rocketed in the past year or two due to an acute shortage of housing, historically low interest rates and cheap access to capital from the government's pandemic-inspired stimulus spending.
A raft of new measures introduced by the government and the central bank have so far done little to cool the red-hot property market.
"The housing crisis is a problem decades in the making that will take time to turn around," Housing Minister Megan Woods told a news conference. "There is no silver bullet, but combined with other measures taken by this government these changes will start to make a difference."
The new rules will enable more medium density housing by allowing up to three homes of up to three storeys to be built on most sites without the need for resource consent. Currently district plans only allow for one home of up to two storeys per site.
The government will also bring forward by a year the implementation of the National Policy Statement on Urban Development (NPS-UD) that cuts red tape that block housing developments.
The changes would result in 48,200 to 105,500 new homes being built in next five to eight years, Woods said. The housing crisis and the economic impact of COVID-19 has led to increased homelessness and fuelled inequality in New Zealand, posing a challenge to the Labour Party-led government of Prime Minister Jacinda Ardern.
The plans received bipartisan support on Tuesday with the opposition National Party leader Judith Collins backing the move.
"It is a positive reflection on our democracy and our system of government that, when the time requires, National and Labour can work together to tackle the big issues facing New Zealand," said Collins, who attended the news conference with Woods.
The government said the new plans are not expected to result in an immediate drop in house prices, which have soared by nearly 30% in just 12 months, but house price inflation will abate over time.
(Reporting by Praveen Menon; Editing by Lincoln Feast.)