OECD Economics Department Working Papers

ISSN :
1815-1973 (en ligne)
DOI :
10.1787/18151973
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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
 

Policies to Rebalance Housing Markets in New Zealand You or your institution have access to this content

Auteur(s):
Calista Cheung1
Author Affiliations
  • 1: OCDE, France

Date de publication
01 jui 2011
Bibliographic information
N°:
878
Pages
42
DOI
10.1787/5kg8gj13xxf5-en

Cacher / Voir l'abstract

A considerable housing boom has been a key feature of persistently large saving-investment imbalances in New Zealand over the past decade. Wealth is concentrated to a greater extent in property compared to most other OECD countries, leaving households and the banking system heavily exposed to a correction in land and housing markets. Supply rigidities and tax incentives that bias savings decisions towards property investment have amplified the increase in house prices, widening wealth inequalities in the form of larger homes for those who can afford them, but deteriorating affordability for the rest of the population. Substantial distortions via tax planning have been evident in rental property markets. Although the 2010-11 budget introduced measures to reduce some of these distortions, further reforms are needed to remove the significant tax bias favouring housing. The economic downturn has increased financial pressures on the social housing sector, with a shortage of public dwellings in areas of high demand. Regional supply constraints reflect inefficient land-use policies and long delays arising from an overly complex urban planning system. The adoption of spatial planning frameworks is a positive step forward, but they should include pricing mechanisms for land and road use that are aligned with broader policy objectives. This Working Paper relates to the 2011 OECD Economic Review of New Zealand (www.oecd.org/eco/surveys/NewZealand).
Mots-clés:
property tax, household saving, housing taxation, housing policies, housing prices, capital gains tax, land prices, urban planning, housing markets, New Zealand, housing wealth, land-use planning
Classification JEL:
  • E21: Macroeconomics and Monetary Economics / Macroeconomics: Consumption, Saving, Production, Employment, and Investment / Consumption; Saving; Wealth
  • E32: Macroeconomics and Monetary Economics / Prices, Business Fluctuations, and Cycles / Business Fluctuations; Cycles
  • H21: Public Economics / Taxation, Subsidies, and Revenue / Efficiency; Optimal Taxation
  • H23: Public Economics / Taxation, Subsidies, and Revenue / Externalities; Redistributive Effects; Environmental Taxes and Subsidies
  • H24: Public Economics / Taxation, Subsidies, and Revenue / Personal Income and Other Nonbusiness Taxes and Subsidies
  • H71: Public Economics / State and Local Government; Intergovernmental Relations / State and Local Taxation, Subsidies, and Revenue
  • R21: Urban, Rural, Regional, Real Estate, and Transportation Economics / Household Analysis / Housing Demand
  • R31: Urban, Rural, Regional, Real Estate, and Transportation Economics / Real Estate Markets, Production Analysis, and Firm Location / Housing Supply and Markets
  • R38: Urban, Rural, Regional, Real Estate, and Transportation Economics / Real Estate Markets, Production Analysis, and Firm Location / Government Policy; Regulatory Policy
  • R52: Urban, Rural, Regional, Real Estate, and Transportation Economics / Regional Government Analysis / Land Use and Other Regulations