Economist: Cut migrant numbers to bring down Auckland house prices

By Jimmy Ellingham, Isaac Davison

The average cost of a house in Auckland is now about $956,000, according to the latest figures issued by QV.
The average cost of a house in Auckland is now about $956,000, according to the latest figures issued by QV.

Cutting the number of immigrants allowed into New Zealand could reduce Auckland house prices by a quarter within two years, an economist claims.

Michael Reddell told TVNZ's Q+A yesterday that cutting migrant numbers would help bring down the cost of housing.

An immediate reduction in immigration to as few as 10,000 people a year would lead to a drop in prices in the over-heated market within two years, he predicted.

"If we changed that [immigration] target from the 40,000 to 50,000 a year to the 10,000 to 15,000 thousand a year, we'd see house prices in Auckland, I suspect, 25 per cent lower within a year or two.

"That would take a huge burden off young New Zealanders, particular poor New Zealanders trying to get into their first house."

The average cost of a house in Auckland is now about $956,000, according to the latest figures issued by QV.

If Mr Reddell's prediction came true, that price would reduce to about $716,000. That's the equivalent of the May 2014 average for the city and well above the current nationwide average price of $578,000.

Last year, a record 68,000 immigrants arrived here and about half our migrants are believed to settle in Auckland.

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The Government has ruled out stemming the flow from overseas, saying that a large proportion of arrivals are returning Kiwis.

It also says high net migration is only one part of a rare "trifecta" of economic trends " along with low interest rates and high confidence in the economy " putting pressure on housing and infrastructure.

Economist and blogger Michael Reddell.
Economist and blogger Michael Reddell.

But New Zealand First leader Winston Peters told Q+A we shouldn't take people from countries that "treat women like cattle".

He said migration should be cut to a maximum of 15,000 people a year and as few as 7000. He called for every migrant to be interviewed at the border to check that they respected New Zealand's "views".

The policy was not based on race, Mr Peters said.

"They could come from anywhere in the world, as they have, and some have been brilliant people who have come into this country as both refugees and immigrants.

"But here's what we want. We want them to salute our flag, respect our laws, honour our institutions and, above all, don't bring absolutely anti-women attitudes with them, treating women like cattle, like fourth-class citizens."

Asked how he would choose who could come to New Zealand, he said: "You interview each one."

Mr Peters said he did not know the cost of vetting all migrants at the border, but that there was a massive cost in not controlling immigration.

By the numbers

$578,000 nationwide house price average

$956,000 Auckland average

$716,000 Auckland average if it dropped 25 per cent

- NZ Herald

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