Bishop wants house prices to fall. PM Luxon wants them to rise

Monday, 25 August 2025

Housing Minister Chris Bishop has called for prices to fall — a stance that differs from his party leader, Prime Minister Christopher Luxon. This challenges National Party orthodoxy and risks unsettling voters whose homes are their main asset. Senior political reporter Bridie Witton looks at what is at stake.

When former Green Party co-leader Metiria Turei in 2016 suggested house prices in Auckland needed to fall over the longer-term, the backlash was swift and unforgiving.

Sir John Key, then prime minister, called it a “war on the poor” while Andrew Little, then Labour leader and prospective coalition partner, dismissed it entirely, sating “it’s not going to happen in the next Labour-led government.”

Turei stood by her view proposing a target for house prices drop to about three to four times the median household income.

The next year, she resigned as co-leader after facing more backlash when she disclosed she had defrauded the benefit system, while she was studying full-time as a single mother, and the idea of a drop in the housing market being positive disappeared.

Labour, under Jacinda Ardern, campaigned on ending the housing crisis but stopped short of calling for an actual decrease, only going as as far as calling for smaller increases in house prices.

Bishop breaks with National Party orthodoxy

Fast forward eight years. In June 2024, Chris Bishop became the first National MP to openly call for house prices to fall, describing it as a “political imperative” tied to a broader vision of channelling more money into the productive economy rather than locking it up in housing.

He had earlier that year laid out a target for house prices to drop to only three to five times household incomes in the next 20 years, which is well below what they are now in most areas of the country.

Other policies include freeing up land for development, relaxing urban boundaries and freeing up minimum floor and balcony requirements, in efforts to create more housing supply and take some of the heat out of the housing market.

In July he reinforced his message, stating that economic growth shouldn’t be so closely tied to rising house prices. “We’ve got to decouple the idea that the economy is linked to house price growth,” he said.

The same month, Sir John Key raised a contrasting view, telling a group of business leaders in Auckland that the “core of what’s wrong” with the economy is falling house prices.

Prime Minister Christopher Luxon, when asked about the opposing view points on Morning Report on Monday, said he backed Bishop — but also called for “modest, consistent” increases in house prices.

“We want to make sure that we've got productive growth happening in the economy and how do you get better economic productivity into the New Zealand economy, which has been a problem over 30 years,” he said.

“If you don't just want to drive an economy through immigration and house price inflation, we've really got to make sure that we are creating a higher standard of living for people through a more productive economy.”

‘We can’t keep doing what we’ve been doing’

Economist Shamubeel Eaqub says Housing Minister Chris Bishop’s stance on house prices shows the National Party is starting to think about the next generation of voters.

“To win back the support of younger people, we can’t keep doing what we’ve been doing—it’s too late,” Eaqub said. “Bishop is framing housing as shelter first, investment second. That’s not new in his thinking, but it’s a clear acknowledgement that the housing story is fundamentally one of inequality.

“Those already in the market are doing fine; for future generations, it’s increasingly out of reach.”

Eaqub sees a political upside for National, which he believes will also benefit the housing market.

“The Labor government under Phil Twyford and Megan Woods made serious inroads by prioritising house building. National couldn’t just stand by and let housing be the Left’s domain. By taking it out of ideology, it becomes less of an existential threat and more about competing with different and better ideas to solve the crisis.”

At the same time, Eaqub acknowledged the tricky balance of moderating house prices, noting there was a trade-off.

“You can’t increase wealth for some and decrease it for others. At some point, you have to accept that a little sharing of wealth won’t make anyone poor. Even older New Zealanders appreciate how difficult it has become for younger people, even if they can still pass a house to their children, they can’t do the same for their grandchildren.”