PHOTO: In Auckland “some” investors are still buying property but in much smaller numbers. Photo credit: Getty Images.

Real estate agents say the Government’s tax changes are having a “huge” impact on investors, with all regions slowing down after the March announcement.

To try and help first home buyers get a foot in the door the Government cracked down on property investors by increasing the bright-line test from five to 10 years and removing the ability for investors to offset their interest expenses against their rental income.

Real estate agents surveyed by independent economist Tony Alexander, in conjunction with the Real Estate Institute of New Zealand (REINZ), said the changes have made a significant difference to investors.

In Auckland “some” investors are still buying property but in much smaller numbers.

“Investors are on pause,” one estate agent told Alexander.

“I get the feeling when our listings dry up over winter and the price squeeze goes on, investors will realise prices are not falling and will buy back in again.”

It’s a similar story in Canterbury with a “huge decrease” in investors following the Government announcement – but numbers are starting to creep back up.

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