The potential policy changes proposed by the National party, including a shorter Brightline Test, opening up the market to foreign buyers, and reinstating full mortgage interest deductibility, are being closely watched by property investors.
1 Brightline Test
A shorter Brightline Test may encourage some investors to buy or expand their portfolios due to reduced capital gains tax risks. It could also lead to an increase in property listings and sales from those currently struggling with cash flow.
2. Foreign Buyers
Allowing foreign buyers to purchase properties priced at $2 million or more might strain the limited supply of affordable housing further. The estimated annual tax revenue from this is likely less than projected.
3. Interest Deductibility
The phased reinstatement of full mortgage interest deductibility might not significantly boost property investment as weekly costs remain substantial even with full deductibility.
In conclusion, if these policies are implemented post-election victory for National, there could be an increase in demand for existing properties over new builds affecting prices accordingly but overall significant impact on aggregate house prices is unlikely. However, unforeseen consequences like stronger price effects in certain markets cannot be ruled out.
Source from CoreLogic NZ Kelvin Davidson
The opinions and research contained in this article are provided for information purposes only, are intended to be general in nature, and do not take into account your financial situation or goals.
