The Government this week announced a raft of policy changes this week, aimed to help first home buyers enter the burning hot New Zealand property market. 

While the intention is good, I feel the policy changes fall flat by trying to appease all parties, while simultaneously failing to please anyone. 

Firstly, no matter what, property investors were going to be upset, they’ve had a good run for a long while. 

The country, much like many western nations, was in danger of forming a new class system where landowners corner the property market, while many, mostly young people or single-income families, were/are destined to rent forever. 

But it was and still is a “hating the game, not the player”, property investors were just looking out for themselves and right in doing so. I can begrudge them that. 

Before we get into it, let’s look at the new policies changes at a glance: 

• $3.8 billion fund to accelerate housing supply in the short to medium term
• More Kiwis able to access First Home Grants and Loans with increased income caps and higher house price caps in targeted areas
• Bright-line test doubled to 10 years with an exemption to incentivise new builds
• Interest deductibility loophole removed for future investors and phased out on existing residential investments
• Govt to support Kāinga Ora to borrow $2 billion extra to scale up at pace land acquisition to boost housing supply
• Apprenticeship Boost initiative extended to further support trades and trades training

My first bone of contention, as I said, was the government’s changes annoyed property investors, as I said, no matter what they did that was going to happen. I won’t go on about that any further. 

The thing about the policies, to me, is that the best part of them is the support for local councils to accelerate housing developments. More houses on the market is a good thing.

Though I am not convinced that will bring prices down.

I am a firm believer that the gravy train of the last few decades is well-and-truly over, and houses must become smaller, so too property lot sizes. 

For one, the price-per-metre is insane, and two, as a renter my whole life, I am used to living in a shoebox - I’d simply love a shoebox to call my own rather than paying for someone else to have a dozen of them. 

Smaller houses, centred around clever town and community planning is needed across the country. 

I also believe houses need to be earmarked for first home buyers only, and priced accordingly. 

A boost to apprenticeships and trades is much-needed, and it could well go further than the housing market, but I would have liked to see a fund or think-tank developed for innovation in the housing sector, such as scaling pre-fab construction homes. 

Imagine a production line of houses coming out of a factory, almost ready-to-go. Other nations do it, why can’t good ‘ol Kiwi ingenuity do the same? I know some exist, but we need to scale up. 

As for the extension on higher house caps, first home grants and so on, I firmly believe they help, yes, but still don’t solve the problem of runaway prices.

I suspect the market will adjust to this and take a jump higher, with rents following suit as landlords look to cover costs. 

I think a much more multi-faceted approach needs to be taken to solve this problem, as every individual is different and has different wants and needs. 

For example, I know many people who would not mind living in a tiny house suburb, apartments, or in a rent-to-buy situation. 

None of these were on the table as the government effectively took a “throw-some-cash-at-it” approach. 

Unfortunately, if the housing market does not become more affordable, we will continue to see a fairly transient population of young people in the country, as they move to find housing to which they can afford. 

That does not necessarily mean there will be jobs at the place they will be moving, which creates problems on its own. 

It also means a disjointed sense of community, as people move away from the area. 

Central Otago will continue to see young people move elsewhere, for example, to get their foot on the ladder, or stay and take out a high mortgage. 

In taking the middle road, not going far enough for first home buyers, and going too far for property investors, the government has fallen short. 

The only way they can claw this one back is to make it work. 

We’ll probably find out in the next decade, and if it does work, a different government will surely take credit for it.