Heat rising in housing policy

Friday, September 5th 2008, 6:12PM

by Philip Macalister

Housing is, I predict, a topic which will raise its head more in this election than previous ones.  Why? Well the whole affordable housing issue is one which gets plenty of air time at the moment. With the government getting a bill through Parliament this week it is likely to be something talked about during the campaign.

With households under more pressure from higher costs such as petrol and mortgages, and the two big parties positioning themselves in the middle of the political spectrum, the battle for the mortgage belt is likely to be intense.


For property investors there are a series of areas they should be looking at when considering their vote. This week the Greens and National released some policies worth noting.

The Greens have made it clear they would like a capital gains tax on property.

They say that they would manage “investor demand in the private sector by introducing a capital gains tax on all but the family home and tightening the rules around Loss Attributing Qualifying Companies and equivalent methods of achieving tax deductions.”

Meanwhile the National Party released its immigration policy. You may wonder what this means for the property market. It is clear from research that immigration is one of the key drivers of house price growth.

The logic is simple. If you import more people into the country, then you need more houses. Supply and demand means that prices are then pushed up, this is particularly so in Auckland.

While the latest immigration numbers show the number of people coming into New Zealand is starting to rise, the Nat’s policy looks like it wants to increase immigration levels even further. (Although it is unclear what sort of number they are targeting.)
This policy is, arguably, a plus for people who want house prices to rise. (But may be not so good for first home owners wanting to buy.)

My guess has always been that property investors lean heavily towards the right rather than the left. (This was made clear in an email newsletter I saw from one developer this week.)

The two policies out this week do nothing to change that view.
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