housing bust

PHOTO: House prices. FILE

According to experts, the National Party’s new tax policies, aimed at reinviting foreign buyers and offering tax breaks to landlords, could potentially ignite New Zealand’s housing market. Under National’s plan, the current bright-line test, which requires tax payment on house sales within a decade, would be reduced to just two years. Several experts interviewed by 1News believe that it is the combination of these policies that would drive up both housing prices and demand.

Concerns were raised that these policies might continue to divert investment into the housing market rather than other sectors of the economy. Grant Robertson, Labour’s finance spokesperson, expressed doubt about the feasibility of National’s proposals, stating that they could potentially exclude first home buyers from the market.

Nerida Conisbee, Ray White’s chief economist, suggested that the opposition party’s policies could indeed impact property prices in New Zealand’s pricier real estate markets, such as Queenstown, especially if foreign buyers return. National anticipates generating approximately $740 million from these changes, which involve imposing a 15% tax on home purchases exceeding $2 million. However, Conisbee pointed out that the level of foreign demand might not be as high as in the past, potentially leaving a significant gap in tax revenue.

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National leader Christopher Luxon defended his party’s financial estimates and evaluations, emphasizing their confidence in their numbers.

On the other hand, National claims that its policies would ease the situation for landlords, which they argue would benefit renters. Property investor Shirley Berryman expressed the viewpoint that landlords strive to provide cost-effective housing, but she did not anticipate a drop in rents as a result of these potential changes. According to her, rents are currently not at their lowest possible levels.

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However, the assertion that these policies would benefit renters was disputed by the Greens and advocacy group Renters United. A spokesperson for Renters United, Geordie Rogers, expressed certainty that giving landlords more financial incentives would not lead to lower rents. He also criticized the political parties for not giving enough attention to the construction of new housing.