As the proverbial dust settles after New Zealand’s shift in government power, a new dawn is rising on the country’s housing market. With the National-led coalition now at the helm, the landscape is set for a dramatic transformation, marked by a powerful swing away from the tenant-friendly policies of the previous Labour government.
Reclaiming Landlord Rights
One of the most contentious changes proposed by the National-led coalition is the removal of the 90-day no-cause termination provision. This change would effectively return some power to landlords, a shift that has been met with a mix of trepidation and relief within the property sector. The move is a stark departure from the tenant-centric policies of the past, reviving the debate on the balance of power in rental relationships. The implications of this shift are yet to unfold, but it is clear that its ripples will be felt across the country’s housing market.
A Stimulus for Price Recovery?
The New Zealand property market is currently in the grips of a downturn, with prices having dropped 13% from their peak in late 2021. However, the National-led coalition’s ascent to power is expected to inject a stimulatory force into the market. Strong immigration, robust employment, and the perception that the new Government would drive prices back up are anticipated to rejuvenate the market. National also proposes to invite foreign buyers back to the market with a 15% tax on properties they purchase over a value of NZD 2 million. This could potentially unlock a new source of capital flow into the property market.
Addressing the Housing Shortage
Despite these stimulating factors, the housing shortage in Auckland remains a pressing concern. Population growth, driven by immigration, has outpaced the supply of new homes in the region, leading to a shortfall of over 400 homes for the year. This housing deficit is also intensifying infrastructure pressures, from water to transport, health, and education services. Moreover, the reluctance of boomers to downsize is exacerbating the housing shortage. Many are choosing to stay in their large family homes, causing unnecessary urban sprawl and a reluctance for young families to move into central suburbs.
The incoming government thus finds itself grappling with a complex knot of challenges. The navigation of these issues – from landlord rights to housing shortages, and affordability – will shape the future of the housing market in New Zealand. As the National-led coalition takes the reins, its policy impacts will be watched closely by renters, first-home buyers, state house residents, property investors, and foreign buyers alike.
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