House prices in New Zealand and other English-speaking countries such as Britain, Australia and Ireland have increased markedly over the past decades. However, such house price inflation is not a law of nature as countries like Germany and Switzerland demonstrate. Despite similar economic circumstances, both countries have managed to keep inflation-adjusted house prices stable over long periods of time.
As Oliver Hartwich argues, it is a different way of funding local government that explains the difference in house price developments. Where local government has more financial incentives to allow development, it will show a different attitude towards it. This does not only apply to residential development but to business development as well.
Could New Zealand benefit from a Swiss-style localist revolution? And could local government finance be the key to solving our housing affordability problems?
Dr Oliver Hartwich is the Executive Director of The New Zealand Initiative, an independent public policy think tank supported by chief executives of major New Zealand businesses.
Before joining the Initiative, he was a Research Fellow at the Centre for Independent Studies (Sydney), the Chief Economist at Policy Exchange (London), and an advisor in the UK House of Lords. His publications have covered a wide range of topics, including housing, transport, local government, and global economic issues. He holds a Master’s degree in Economics and Business Administration and a Ph.D. in Law from Bochum University (Germany).
Dr Hartwich is a frequent media commentator and writes popular columns in the Business Spectator (Melbourne) and the National Business Review (Auckland). His articles have been published by major newspapers in Britain, Germany, Switzerland, Australia and New Zealand.