The 2017 New Zealand election may be out of the way but its impact is still being felt in the NZ property market. Uncertainty continues to weigh in with spring sales noticeably lower than previous years. Nationwide residential property values rose for September, although a much smaller increase was recorded in the Auckland region. Read on to find out how New Zealand’s property market is expected to perform, post-election.
Uncertainty over housing policies
With the final make-up of the new government potentially weeks away, the housing market appears to be taking a “wait and see” approach to expected changes. CoreLogic, in its latest report, said buyers were likely waiting for more certainty over housing policies, post-election.
Growth in property prices is the lowest it’s been in five years, just under 5 per cent nationwide and just under 3 per cent in Auckland, said head of research at CoreLogic, Nick Goodall.
Across the country, residential property values increased by 4.3% nationwide for September, with the nationwide average value now at $646,378. In the Auckland region, residential property values increased by just 0.8% year on year, showing a -0.6% drop in values over the past three months. The average value for the Auckland region is $1,039,066.
Property Institute CEO, Ashley Church, said the post-election impact on the property market can be largely predicted, and that a possible ban or partial ban on the sale of New Zealand residential property to foreign buyers, and changes to the Reserve Bank Act focusing on housing targets are likely.
“Reducing immigration inflows and amending the Reserve Bank’s targets, in particular, are likely to have a sustained impact on the market. What’s less clear is whether that impact will flow through into the broader economy and slow down economic growth,” said Church.
Other policies that could impact the housing market include reducing immigration numbers, a moratorium on considerations regarding capital gains tax, a focus on the government increasing housing supply, and the creation of one or more Urban Development Authorities.
Housing is a big focus
Although the outcome of the 2017 election is not yet decided, a big part of the new government’s focus is on housing: National plans to build 200,000 new residences, NZ First wants to restrict foreign investment opening up more homes for locals, and Labour has plans to build 100,000 new houses over the next decade.
National is also reaffirming its support of first home buyers by increasing the HomeStart Grant to $30,000 for a couple buying their first home.
A good time to review your home loan
With house sales slowing, it’s a good time to review your financial situation and plan ahead. If you are thinking about refinancing or refixing your home loan rate, get in touch with a Mortgage Express adviser to go over your options.
While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Mortgage Express Limited for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication.
A Disclosure Statement is available on request and free of charge.