2... I disagree with, in the sense that you should still try to reduce the gap and we arent doing enough. You can make it less attractive to own multiple homes or curb airbnb etc to somewhat alleviate supply issues. It is not a panacea but you can reduce the issue.
There is a lot of demand remaining, but if you look at a graph of house prices, there’s a very steep wall at the lowest house price and you can’t buy anything below that wall price. Where does that wall come from? From unmet demand and the amount that a person with an average wage can only just pay the mortgage. Everybody bids against everyone else to get a house (a true zero-sum game for the New Zealand economy), and house prices are set by that bidding process.
Adding some houses won’t fix that, until you reach a point when there are a few too many houses and prices crash due to #1 and everybody who had a lifetime of savings in their home from working is sad.
Also we get people on the benefit who inherited a property, and then get paid more in capital gains than a working person (one working couple I know have saved a few hundred thousand over decades, while a mum with teenage kids on the benefit has “saved” twice as much by doing nothing but owning her home).
Meanwhile there are people that don’t earn enough to save for a deposit, or get a big enough mortgage to compete, who have to rent. So we get landlords profiting off their circumstances.
There must be a market for rent-to-buy for flatmates??!
In summary: there is a lot of trite solutions out there, usually with political party affiliations. The problem is deeply complex, and some parts of the system have to be unfair because by definition not everyone can live in a high status area. The only fair way is to make everybody equal by removing wealth from the rich (which unfortunately still doesn’t fix the status issue because status is not just money - see non-capitalist societies).
This wouldn't be much different than the post WW2 construction boom.
The difference now though is we all know the system is so captured that this could never happen in the US. Wallstreet would never let this happen. There would be bullshit arguments about market efficiency and how this would be harmful to single families. The right political palms would be greased and the whole idea would be dead on arrival.
Problem solving at this level is literally a type of kayfabe from Pro Wrestling style performance art in 2023.