I’ve been among those suggesting that the KiwiBuild programme – even if it involved the government itself directly commissioning the building of new houses that no existing developer already had in prospect – was unlikely to increase overall housing supply very much, or affect overall average house prices very much. It was never clear how such a programme could affect overall housing supply very much. For it to do so, there would have to be large unexploited profits left sitting on the table by private developers (properties selling for far more than it would cost to bring new developments to market). If that isn’t so – and we don’t see any obvious signs of such unexploited opportunities – whatever the government itself builds or commissions is just likely to mostly displace and replace houses that the private sector would have built. (There is another possibility, that the government not…
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