A Labour win for landlords to celebrate
Wednesday 19 November 2014
It's not often property investors celebrate a Labour victory, but this time they can.
By Philip Macalister
Former trade union boss Andrew Little was, yesterday, elected leader of the Labour Party. While that may mean little on the face of it it is good news for property investors.
During Labour's leadership campaign where the four contenders pitched their wares to party members Little made it clear he would ditch the party's proposed capital gains tax policy.
The policy is still to be formally ditched but a sign it will happen is that fellow leadership contender, and former finance spokesman David Parker announced yesterday that he would not continue on in this role.
As the architect of the policy, his decision can be seen as a good sign that this policy, along with one to raise the age of eligibility for NZ Superannuation, will go.
While it is a long time until the next general election, and the prospects of Labour winning that battle may seem a long-shot today, investors can breathe a sigh of relief.
Short term factors which are more likely to impact the housing market are continued reductions in home loan rates and, one suspects, the recent valuations released in Auckland City. The majority of people owning property in the City of Sails now will have quite a bit more equity than they did before. Whether investors decide to use this capital to increase the size of their portfolios, and if they chose to buy more Auckland property or look to surrounding provincial areas will be something to watch
One clue that this may happen can be seen in Rotorua. The Professional real estate office is reporting a pick up in sales to Auckland landlords and says it has more out-of-town buyers.
While there are signs that the real estate market may get a new head of steam the Reserve Bank has made its position clear. Governor Graeme Wheeler said, when releasing the Financial Stability Report, that the bank would like to see house prince inflation move in line with income growth.
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