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Is The Housing Market Impacted By The Change In Government?

Author

Alvin Zhong
November 28, 2023

Wednesday 29th November, 2023

🔎 Table of Content

  1. What Does The Change In Government Mean For The Housing Market?

  2. RBNZ Expected To Hold OCR Steady at 5.5%

  3. What Is Happening To Rent Prices?

What Does The Change In Government Mean For The Housing Market?

To keep it brief, the coalition deal does not mean much for the property markets.

Here’s why :

National’s foreign buyer tax, which included a 15% foreign buyer tax on houses worth over $2 million, to raise $740 million on average per year, is no longer happening.

Under National’s new plan, investors can claim 60% this tax year, 80% in 2024/25 and 100% in 2025/26.

This may change things for investors looking to enter the market & will create smaller tax bills for investors who are already in the market.

Is this a game-changer? No.

The new Government wants the RBNZ to focus solely on bringing inflation back to the target rate (1% to 3% over the medium term).

Arguably, this may not make much difference to monetary policy.

RBNZ Expected To Hold OCR Steady at 5.5%

The RBNZ will announce its last OCR decision for the year today.

For the past four meetings, RBNZ has held firm at 5.5% & is expected to continue to do so.

So, the focus should be on any meaningful changes to to RBNZ’s forecasts for GDP, employment, inflation, & house prices.

“I don’t anticipate too much change to any of those projections, given that the incoming data in recent weeks has been tracking largely as the RBNZ would have been hoping for."

Kelvin Davidson (OneRoof)

What Is Happening To Rent Prices?

TradeMe says that rents are up 6.9% over the past year.

It’s even higher in some regions.

In Canterbury, average rent are up 10% over the past year.

In Auckland, rent prices are up 11.7% & Taranaki rent prices are up 11.1% compared to last year.

There aren’t enough listings, & the ones that are get snatched up extremely fast.

The average time to find a tenant in the Rotorua district is 15 days.

In Taranaki, it’s 12 days.

Per 10,000 people, there’s less than one rental available in Taranaki & less than five available in Rotorua.

There is a lot of pressure all across the rental market in New Zealand.

According to CoreLogic, rental yields have soared 6.1%, nearly double the long-term average growth rate, and are at their highest since 2020.

That’s A Wrap

Kiwi property investor make 4 common mistakes.

Want to know what they are?

Refer Capital Cafe to a friend & we will share it to you.

Talk to you tomorrow,

Alvin Zhong

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