New Property Rules May Lower Houses Prices Eventually
June 8, 2015 New Zealand Taxation
The government’s upcoming rule changes may have a positive effect of property availability, but they fail to tackle the issue of housing supply or to incentivize first-time buyers.
In a recent online interview the managing director of Barfoot & Thompson Peter Thompson suggested that the measures being taken by the government to ease the conditions on the housing market will have an effect, but it is not yet known when those effects will kick in.
He said that as a large number of property investors hold their acquisitions for more than two years, they will not feel the effect of the upcoming rules regarding the taxation of capital gains made from the sale of property.
He added that the new rules regarding the restriction of lending to properties in Auckland will have some effect on prices, but the timeframe is unknown, and, instead, it would be more effective to examine the supply of property and how it would affect house prices.
He added that the demand for property in the Auckland region is rising more than previously expected, and there would not be a let up in this demand in the foreseeable future.
Further, as a means of addressing the rising prices, he suggested that the lending rules for properties valued at less than NZD 500 000 should be eased to encourage the development and purchase of houses for first time buyers.
Photo By: Brandon Blahnik