The government’s housing package announced last week helps tip the balance in favour of first home buyers but is causing concern among landlords and tenants.
Anthony Carppe is both a property investor and a real estate agent and says the housing initiatives may see investors selling rentals or putting up rents.
“Not everyone can, or will, ever be able to afford to buy a house. We need more rentals and more affordable housing. This new initiative will make things worse because property investors will put up rents to cover new costs and that will make it harder for some people to save for a first home,” he says.
He says, currently, he could pick five people for each rental when he needs new tenants, and if investors sell it is going to make it harder for many to find accommodation.
Removing the ability for property investors to offset their interest expenses against their rental income when calculating their tax will remove the advantage investors have had over first home buyers.
If the changes do lead to investors selling, there will be more properties available to first home buyers which may stabilise house prices.
So, home buyers are likely to be better off, but investors and renters disadvantaged.
“New Zealand’s housing crisis has been decades in the making, and there is no silver bullet to fix this. It’s an issue that will take time to turn around, and will require everyone working together on solutions,” says Nelson MP Rachel Boyack.
With the increase in income caps on the First Home Loan and First Home Grant programmes from $130,000 to $150,000 for two or more buyers, and raising the new property house price cap in the Tasman region from $550,000 to $600,000, the government is hoping more people can access this support. The cap for existing property has moved from $500,000 to $525,000.
“There wouldn’t be many houses for sale under $525,000 in the Richmond area but there were a few listed in other areas,” says Bayleys’ Matt Johnson.
Along with the measures affecting first home buyers and property investors, key points in the package related to new builds.
The launch of a $3.8billion Housing Acceleration Fund aims to speed up house builds and fund vital infrastructure such as pipes and transport links needed for new housing.
There are incentives for new builds and removal of barriers holding them up.
Complex new housing lawComplex new housing law