Property investment issues haven't been something to feature on the agenda of recent election campaigns, however I predict this year will be different.
Already there are signs that Labour and National will be talking about property. The NZ Herald on the weekend had a short piece on the front page saying that new Housing Minister Maryann Street was looking at housing affordability issues, possibly including changes to the way investment property is taxed.
Landlords.co.nz has confirmed something is happening in this story here and it is one we will watch closely.
This whole issue of home affordability is a story you will read and hear a lot about this year. In the past week I have heard from a number of quarters that officials in Wellington are furiously working on the issue.
I've been a little sceptical about this subject. Sure it is harder to buy a property at the moment, but I tend to think that some of these surveys are so general in their approach that they don’t paint a particularly accurate picture.
The question to ponder is: What does it mean for property investors?
That's the bit which is a little more tenuous. In broad terms, if people can't afford to buy a house then they are likely to be renters. This means a bigger rental market. If the government introduces changes to make it easier to buy property, then the opposite happens.
What is unclear is whether it is a big issue or one which impacts investors only marginally?
The other bit I struggle with is the so-called solutions to the issue. If you believe some, it's all about the Resource Management Act (RMA) and land supply issues.
I'm not convinced that is the full picture. Or put this way - yes they are issues, but not the primary ones.
It is more likely the RMA/land supply issues are being pushed by opposition politicians and lobbyists for their own agendas.
As I said, this will be a hot issue this year and we would love your thoughts on the subject.
PS: It would be foolish for a government to mess with the tax treatment of property investment, given New Zealanders’ propensity to invest in real estate as opposed to financial markets.
There are something like quarter of a million landlords in New Zealand and for many of them property is their retirement fund.
What's behind the housing affordibility crisis? The answer is simple: Cullen's inflation! Instead of trying to find scapegoats in the property sector, wouldn't it be a good idea for the Government to get spending in unproductive sectors under control? Cutting back on all that red tape (which this Government promised to act on but have failed to deliver) would go along way to help solving the problem as well. Fat chance with this lot though.
On 15 February 2008 at 3:27 pm Luke McNeath said:
"There are something like quarter of a million landlords in New Zealand and for many of them property is their retirement fund. To mess with this is political suicide."
Don't forget that for every landlord there must be at least one renter, who is currently watching house prices becoming increasingly unaffordable. So renters actually outnumber investors. Perhaps ignoring the future of more than a quarter million renters is political suicide in a democratic country?
There was a time when to propose an African American candidate for the US presidency would have been political suicide. Times change. Of course, for the upcoming election NZers will choose whichever party offers the most compelling short-term enticements. And so the decline of NZ down the OECD rankings will continue.
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Property investment issues haven't been something to feature on the agenda of recent election campaigns, however I predict this year will be different.
