Keith Melville

have seen two or three articles in recent months appealing for greater expansion of state housing in the Eastern Bay, but they all fail to mention the key factor that drives successful property development, including state housing – economic stability.

Nowhere in the opinion pieces by WHARE (Whakatāne Housing Action Reform Enthusiasts), and others, as published in the Beacon, was there any discussion – nothing, zero, zilch – on the fundamental elements of stability, specifically low inflation and low interest rates.

Yet, the economic wasteland caused by inflation and crippling interest rates; for example, after the Covid spending binge of the previous government, should be a stark warning of what happens when you ignore economic reality.

High inflation means higher costs and higher interest rates, and rising costs tend to cripple cost-sensitive property developers, construction companies and builders.

The wasteland of economic instability is littered with insolvent or bankrupt property developers, construction companies and builders.

These business types are usually highly leveraged and the first to suffer in an unfriendly economic environment.

Kainga Ora, the state housing agency that the WHARE supporters like to romanticise about, chalked up enormous debts in the Covid and post-Covid inflationary period.

The banks would never have tolerated those debts for private developers and builders, but they were tolerated in the state sector because there were suckers called taxpayers to fund the Kainga Ora bills.

Kainga Ora was eventually called to account but even the fall-out from its big spending ways, including the cancellation of major development plans for the old Countdown site in Kopeopeo, Whakatāne, has failed to colour the thinking of the dreamers.

Their failure to mention the importance of stability in any article promoting housing development is astounding.