December 10, 2023

The Front Page: How a National-led coalition will change our housing market

There are signs of the housing market coming back to life. Photo/Getty Images

Property is the biggest investment most of us will make in our lives – and it’s often the biggest expense we face on a monthly basis.

With a change in government, property rules will invariably shift as politicians look to deliver on the promises they made to voters.

These changes will lead to winners and losers, as the balance of power swings. NZ Herald property editor Anne Gibson tells The Front Page podcast the change in government will ultimately affect renters, first-home buyers, state house residents, property investors and foreign buyers.

“Labour introduced what was seen as the biggest change in the tenancy area for about 35 years,” Gibson says.

“What they did was swing the balance away from landlords more towards tenants, giving them more surety of tenure and more rights.”

National and Act have both campaigned on returning at least some power to landlords once they step into government.

“National’s housing spokesman Chris Bishop said they would make quite a few changes – and one of those is removing the 90-day no-cause termination provisions … what he’s saying is that amendments introduced under Labour would be reversed.”

These changes would come at a time when the country’s property market has struggled, with house prices dropping over the past two years.

“The peak of the market was late 2021 and prices are now down just over 13 per cent nationally and far more in Auckland,” Gibson says.

“But this is still up on the pre-Covid quarter. Prices are actually up 24.3 per cent or $177,000 now than they were pre-Covid.”

There are also a number of stimulatory forces that will start to push those numbers higher in the coming year.

“[Researcher] CoreLogic has noticed things that are very stimulatory to the housing market, like strong immigration, very strong unemployment and the perception that the new Government, particularly in an Act coalition, would push prices back up.”

Data from NZME-owned OneRoof shows the number of listings on the market is starting to increase, indicating activity is starting to pick up after a subdued period.

National has also proposed inviting foreign buyers back to the market on the condition that they pay a 15 per cent tax on any properties they purchase over a value of $2 million.

“We’ve got 50,000 homes in New Zealand that are worth more than $2 million,” Gibson says.

“CoreLogic looked back in the last year and said there were about 2,500 houses in New Zealand that sold for $2 million-plus.”

Gibson says the policies National plans to introduce would bring Aotearoa in line with what happens in many international markets.

But what does all this mean for first-home buyers and renters? And what will happen to the many New Zealanders living in state housing?

Listen to the full episode of The Front Page for a full rundown on the changes heading for our housing market.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.

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