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WATCH: Hard on the heels of the Reserve Bank increasing interest rates Newsroom Pro editor Jonathan Milne talks to Kiwibank chief economist Jarrod Kerr about what the move will mean for the overheated housing market, small business owners and savers
Jarrod Kerr has learned more about the housing crisis from building his own home than he has from Reserve Bank statements and Commerce Commission inquiries.
The Kiwibank chief economist and his wife have just finished their house on a ridge about Mangawhai.
“It proved to me how broken the New Zealand market is, and just how difficult it is to build in this country,” he tells Jonathan Milne, on Newsroom Pro Talks. “I went to a kit set builder in Australia, and I said, I like that design of a house. They modified it, made it into a kit set, put it into 240 foot containers, and they shipped it down here.
“Now in doing that, I saved about a third of the building costs by importing all the steel frames, the roof, the gib board – all the building materials except for insulation came from Australia, and it came at a much, much cheaper price than trying to buy it here.”
Kerr has long argued that the only sustainable answer to the housing crisis is building more houses. Demand-side solutions like this week’s interest rates hikes, and the government’s tax changes, are only short-term fixes.
But he says that is made more difficult by problems in the building supplies chain. This week, the Commerce Commission opened market study into competition in residential building supplies.
The Reserve Bank warns there are other emerging challenges – in particular, the climate crisis impacting on house prices and rents.
Kerr says that will mean rising insurance premiums, cancelled policies, and increasingly, banks refusing to lend on uninsured coastal properties. That’s why he is building his house up on the ridge, beyond the reach of the rising waters.
With waterfront houses rendered uninhabitable, Kerr says New Zealand faces a new challenge to housing supply that means we need to build faster than ever.
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Newsroom Pro Talks is made with the support of Spark.
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