National's victory at the polls is likely to shake up the housing market, with the party having pledged to overturn the foreign buyer ban for $2m-plus homes and to restore interest deductibility for investment properties.
Ahead of yesterday's poll, OneRoof asked various experts what impact these policies would have on a market that that is slowly emerging from a prolonged price slump.
Valocity senior research analyst Wayne Shum
Shum says the change in government won’t have an immediate impact on prices. “It’ll take six to nine months before National’s tax and housing policies actually take effect. But the psychological impact of a change in government will be apparent in people’s intentions,” he says.
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“For example, if I know that eight months from now I can buy an investment property, then I can start preparing for that by cutting my expenses so my CCCFA check looks better.”
Ray White chief economist Nerida Conisbee
Conisbee believes interest deductibility should be revoked, saying it’s tough to be a renter in New Zealand and when policy makes it harder for investors the supply of rental properties is affected.
“That’s where I get frustrated with these policy changes. I mean, government has no money. Covid was really expensive and we don’t have a big institutional ownership of rental properties in Australia and New Zealand.”
Ray White chief economist Nerida Conisbee: "Covid was really expensive and we don’t have a big institutional ownership of rental properties in Australia and New Zealand." Photo / Supplied
Conisbee concedes more investors in the market will affect the ability of first-home buyers to get into the market, but says if there were enough homes that would not be a problem.
“It’s the same in Australia, there are not enough homes so you do need to look at how you create enough homes so there isn’t this battle between first-home buyers and investors.”
CoreLogic NZ chief economist Kelvin Davidson
Davidson expects house prices to be higher under National but he does not think the impact would be massive.
Even if National shortens the bright-line test and slowly reinstates interest deductibility, investors still face higher mortgage rates.
“So it helps to save a bit of tax, of course, and it might bring in some investors who otherwise might not have purchased but will it wholesale change the game for investors? I’m not convinced because you’re still going to have low rental yields and high mortgage rates,” he says.
“The average property that you might invest in is still going to need a significant top up to keep it going in terms of cash flow.”
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