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Your policy of "crash prices and keep them low" has the greatest impact on owner-occupiers. If you look at historic collapse of housing bubbles, it's the negat

Your policy of "crash prices and keep them low" has the greatest impact on owner-occupiers. If you look at historic collapse of housing bubbles, it's the negative equity / underwater owner-occupiers who suffer losing their home or losing their mobility. Speculators simply shrug it off since they have the flexibility to move their investments. An increase in average wage growth would support both owner-occupiers and first time buyers.

ericd 9y ago
There are deep structural reasons for the lack of wage growth, so that's not a feasible near-term solution.
- elyobo 9y ago
  It's not a solution over any time period, because without fixing the drivers of the price growth in the property market any increase in purchasing power will be met with property price growth to absorb it.
  - ericd 9y ago
    Good point, I agree.
elyobo 9y ago
Most owners are not impacted by "crash prices and keep them low" because they have experienced enormous capital growth. Auckland prices have doubled in the last four years; a 50% crash would leave almost everyone in the property market before then no worse off. Speculators can move their investments, but they have to accept the loss in order to do that. An increase in wages without fixing the underlying drivers for property price growth will not support owner occupiers or first time buyers at all, because property price growth will match or exceed that growth. Crash prices, keep them low and stable after, it will be rough and unpopular for a while but will eventually be the best outcome.