KEY POINTS:
Politicians competing to claim the issue of housing affordability as their own have been a given a reality check by the Reserve Bank - a warning that it could be a decade before any legislative changes have much impact.
The struggle to buy a house has been put firmly on the political agenda by both Prime Minister Helen Clark and National leader John Key.
But while the two leaders prepare to take the fight through to next year's election, the Reserve Bank has offered a sobering view on whether there are any quick fixes.
"What we're looking at, over a long period of time, is a trend that has probably become more unfavourable," the central bank's head of economics, John McDermott, said of home affordability at a select committee hearing yesterday.
"This will not be solved tomorrow ... this will be an ongoing issue for New Zealanders over many, many years."
Economics adviser at the Reserve Bank Phil Briggs echoed the message with regard to land supply.
"It's not going to be easy to work through the issues related to supply," he said.
"It really is going to be a long-term programme, five, 10 years probably we're looking at."
The bank's senior adviser, Bernard Hodgetts, also referred to a five to 10-year timeframe when talking about how long it would take to change home ownership rates.
The Reserve Bank's submission included a request that the select committee focus on increasing the supply of housing, and it cautioned against offering subsidies to first-home buyers.
Such subsidies ran the risk of being self-defeating because they potentially increased demand and that flowed through to price increases.
The Reserve Bank also suggested a review of tax policy on investment income to examine how housing was treated compared with other financial investments.
Asked if the bank expected a surge in mortgagee sales as the housing market cooled due to higher interest rates, the bank's team said it was not expecting a big increase.
