An election’s coming, and property is always fertile ground for campaigns to dig around in. So I caught up recently with Miriam Bell, senior business reporter at The Post, who covers this stuff for a living, to get a proper read on where things actually stand.
Where Prices Actually Are Right Now
The national picture is pretty simple: prices have been flatlining for a few years, and dipped slightly in recent months. But that headline number hides a very different story depending on where you are.
Auckland and Wellington are down. Christchurch and Southland, on the other hand, have been doing genuinely well over the last year. Invercargill’s actually sitting at its market peak right now.
Point is, “the market” isn’t one thing. If you’re in the regions doing well, the Auckland headlines which include townhouses don’t always give a true picture of what is happening.
Rents Have Dipped Too — But Yields Have Actually Improved
Rents have flatlined nationally as well, and dipped in Auckland specifically, which is good news if you’re a tenant there. What’s more interesting is gross yields — they’ve actually gotten slightly stronger than they were three years ago. Lower prices, steadier rents, and lower mortgage rates are combining to make some areas a genuinely better investment proposition than they were.
That said, “better” is relative and very location-dependent.
What The Parties Actually Agree On
Whatever the campaign noise, there’s more alignment between the major parties than you’d think on the core idea of boosting housing supply. Where they differ is around the edges — how to get there, not whether to.
My own view, for what it’s worth: we may have already hit peak supply in the main centres, simply because build costs have made new development barely stack up. It’s genuinely feeling like you can buy a new townhouse below what it cost to build right now — which is a strange place for a market to be. There are still deals appealing to first-home buyers in that mix, but there’s also a real oversupply of certain housing types in certain areas, even while the country broadly still needs more homes built.
The Capital Gains Tax Problem Nobody’s Solved
Capital gains tax will likely be a genuine battleground this election, and it’s worth understanding the maths, not just the politics. For a capital gains tax to raise what it’s designed to raise, you generally need house prices to keep rising at a reasonable clip. If prices are flat or falling, there’s simply less gain to tax.
Which creates an odd contradiction: a government that becomes reliant on capital gains revenue has an incentive not to see prices come down too far — right at the same time everyone agrees more supply (which puts downward pressure on prices) is the actual fix for affordability. Two goals pulling in different directions.
New Zealand is genuinely unusual among comparable countries in not having a capital gains tax at all. Australia’s had one for a long time and, until recently, hadn’t seen a real decline in prices in about two decades — till now. Worth remembering there’s no simple cause and effect there, but it’s the closest comparable market we’ve got.
What’s Actually Worrying Investors More
Talk to investor groups directly, and capital gains tax barely rates, compared to the concern around interest deductibility potentially returning. The alternative major party has not landed firmly on where they’ll go with it. Whether that actually happens depends heavily on coalition arithmetic as well.
None of this is a reason to make big decisions off campaign headlines. If you’re weighing up buying, selling, or restructuring around any of this, it’s worth talking it through properly grounded on your own situation.
