Exciting times with a whole new government for the first time in nearly a decade. There will be plenty of opportunities in the new market for the brave.
Here are my thoughts on the kinds of shifts we might witness in the housing market.
The great building program
The Labour Party wants to get involved in delivering 100,000 more houses in the next ten years with 50,000 of them in Auckland. NZ First wanted to see some support for home buyers through low interest loans on special government released land.
Expect to see large plots of land being used for this. You would think this would compete on the lower end of the market but there could be some cross overs. Expect to see pressure on the building industry. As smaller developments will tend to get more expensive to do, more establised areas which are close to the new rail network may be a good buy.
Capital gains on the Horizon
After the dust settles, maybe six months slowly an idea will start to settle in. If Labour get a second term say after three years – capital gains tax could be a given. This will likely apply to only new investment properties you buy and not the ones you already own. (this is the case in most countries it has been bought in)
So in my mind the investment properties you buy now could be tax free. This could lead to a little mini boom as you close in on the next election.
Transfer of losses
Loss offset is most likely gone, meaning negative gearing loses its charm. This may lead investors to search for properties with better cash flow. There could be upwards pressure on rents as well as investors hold back due to higher running costs.
Either way there are exciting times ahead and with a lot of change expect lots of opportunties.
