16 Dec 2011

Home ownership tipped to decline further

1:41 pm on 16 December 2011

The Productivity Commission is warning home ownership will continue to decline unless bold changes are made to the housing market.

In a draft report the commission says housing is becoming increasingly unaffordable, especially for young people and those on lower incomes.

With up to 60% of the cost of a house in land, the commission says steps need to be taken to free up more land, particularly in Auckland.

It also recommends speeding up planning consents, standardising council development fees and improving builders' productivity.

The commission says it looked at claims that tax rules favour property investment.

But it says the claims are overstated and notes that property is subject to a range of taxes.

The commission will present its final report to the Government in February.