Planning laws inhibit prosperity. That's what we're told by almost everyone. Those long and tortuous negotiations over what should be built where are a brake on progress. All the major parties and most of the media believe that we would be better off with less regulation, less discussion and more speed. Try telling that to the people of Spain and Ireland. Town planning in those countries amounts to shaking a giant dustbin over the land. Houses are littered randomly across landscapes of tremendous beauty, and are so disaggregated that they're almost impossible to provide with public services. The result, of course, is a great advance in human welfare. Oh, wait a moment. No, it's economic collapse followed by mass unemployment. Spain and Ireland removed the brakes on progress and the car rolled over a precipice. Their barely regulated planning systems permitted the creation of property bubbles that trashed the economy along with the land.
No, really, we've not made this up. That really is what he said. That the absence of strict planning regimes creates housing bubbles. That free supply of land to build upon increases the price of housing.
This is, of course, a confusion of the difference between correlation and causation. It's true that the two countries had liberal planning systems (the Spanish one driven more by bribery than the law but still) and it's also true that the two had housing booms and subsequent busts. But the causation is not between those two things: rather, it's to their joint membership of the euro. Both economies were doing well while that of Germany was not. And within the eurozone interest rates were set to benefit the German economy, not the booming periphery. Thus rates were far too low for the broader economic conditions in Ireland and Spain: thus an asset bubble.
It was free money that drive those booms, not free planning permissions.