This week the Government released a policy package to address New Zealand’s “housing crisis”. In our view elevated house prices is principally a supply issue — the population has grown quickly, and the provision of new homes has failed to keep pace. The policy package does include some initiatives to help supply, but the focus is on the demand-side, specifically targeting investors who own around 35% of New Zealand’s residential properties. It seems likely these policies will encourage some investors to switch from housing to other asset classes and, at very least, cause house price growth to slow. Ultimately though, more supply-side solutions are required.