RESERVE BANK DISCUSSION DOCUMENT ON ALTERNATIVE APPROACHES TO AUCKLAND'S HOUSING CRISIS - FOR INTERNAL USE ONLY: NOT FOR PUBLIC DISSEMINATION.
As we are all aware, the current growth rate of house prices in the Auckland metropolitan region is as unsustainable as it is economic insanity. With traditional fiscal policies and practices having no discernible impact on this runaway market the time has come to think outside the box.
Thus it was that last Friday night, over a few shandies, a working party convened in the staff cafeteria to discuss some ways of dealing with the crisis that may or may not be implementable with across the board co-operation from various Government agencies.
Language Control Protocols (LCP)
For starters, publically calling it a "crisis" does not help. When people hear words like "crisis" and "surging" and "rampant" they get alarmed, and then get excitable. This makes potential house-buyers more likely to panic when at auction and bid ludicrous amounts in fear that there will never ever be another house for sale in the entire Auckland area. Persuading anyone speaking publically about the Auckland fiasco to use words like "serene", "tranquil" and "placid" may not exactly be truthful but it may get everyone out there to calm the #%# down.
Caffeine Level Manipulation (CLM)
Auckland is synonymous with coffee. They drink masses of the stuff up there and not just instant like we've got in the cafeteria here. An already volatile market filled with people ripped to the gills on caffeine is not an ideal combination. The best suggestions we have for limiting the caffeine intake of Aucklanders, to take the edge off the housing market, are:
• Creating a bogus insect along the lines of the Queensland fruit fly, that lives on coffee beans. Primary Industries can quarantine the city and make sure no new coffee gets in.
• Getting the Navy to sink any ships importing coffee beans into Auckland.
• Getting Work-safe to shut down all Auckland coffee roasters on the grounds that roasting is hot and therefore unsafe.
• Start a rumour that coffee contains gluten. Aucklanders are both notoriously susceptible to rumours and also weirdly fearful of gluten, even though most of them are not gluten-intolerant and actually have no idea what gluten is, except someone told them it is bad for them. Should such a rumour take hold we expect coffee demand in Auckland to shrink by at least 50 per cent until someone figures out how to make coffee out of kale.
Although the idea that the Government should simply assume ownership of all the houses in Auckland and then control the market as we see fit was very popular around the table on the night, we were acutely aware of the potential political downsides of such a bold and innovative move. Yes, on many levels it looks like communism, but it would just be a matter of persuading the people that it isn't communism because we are not communists here in Wellington and we would just be running things for their own good.
At the end of the think-tank session, just before the shandy ran out, a sub-committee was formed to do a cost-benefit analysis, running the scenario of an armed uprising by Auckland ratepayers in response to the Government assuming ownership of their houses.
Supply-Side Limitation Technique (SLT)
Another very popular option among the working party was to implement a rather ferocious supply-side economics approach to the matter. Brian's suggestion (after his third shandy) that it be made legal for an arsonist to burn down any house with a "for sale" sign (as a disincentive to property speculators; and an incentive to Brian's cousin who is apparently one of those blokes who lives for Guy Fawkes night) was perhaps a bit too ferocious.
More reasonable, and certainly more politically acceptable than widespread arson, was Noel's suggestion that we should simply round up all the real estate agents and put them in prison. This is logical on many fronts. First, as the people who profit from both the buying and selling of houses, they are the fuel to this fire. Second, without anyone to actually facilitate the transaction, the fire is extinguished. And third, no-one like real estate agents so the political blowback on the Government would be minimal.
In fact, the only downside we could think of to this strategy would be the need to empty all our prison of actual prisoners in order to house the real estate agents. This, however, was deemed an acceptable trade-off for a sane Auckland housing market. We look forward to your response, possibly next Friday night, over a few shandies.