2021 PCE Environmental Regulation and House Price Inflation
Tender ID: 454128
Tender Details
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Despite the social and political attention given to homeownership, unaffordable housing in Aotearoa has persisted over many decades. Since the early 1990s house prices in New Zealand have risen considerably faster than incomes, making New Zealand one of the least affordable housing markets in the developed world. Over the last twenty years, the median house price to income ratio (one measure of housing affordability) grew from 3.0 to 8.15. Home ownership rates are now at their lowest levels for the last 60 years, with one in every three households now renting.
This research will include a desktop study of the major explanatory factors from both supply and demand perspectives that have impacted house price growth in the New Zealand housing market over the last fifty years. While it is acknowledged the causes for the present housing affordability crisis are multiple and complex, we wish to untangle these effects to understand the extent to which the RMA and other environmental regulations have contributed to house price growth. In order to answer this question this research will critically review and synthesise both the academic and grey literature and analyse publicly available data to identify and explain how important supply and demand side factors have contributed to house price growth. The IPCC uncertainty framework (or similar) may be drawn on to provide an assessment of the 'level of agreement' and 'strength of evidence' available to support the relative contribution of each explanatory variable and its effect on house prices.
The final synthesis may include differences across regions of New Zealand, rural and urban environments and urban intensification processes. Descriptive empirical analysis may be used to explore and compare trends in home construction and demolition, home ownership rates, household size, home vacancy rates, macroeconomic indicators, demographics, rental costs, supply of land and other factors that may have been important contributors to house price growth. A final statement on the relative contribution of the RMA and other environmental regulations on housing affordability will be required.
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