Apparently there is no better time than now to buy rental property and this is a new development.
What planet is Bernard Hickey on
? I’ve said for a number of years that the stars have been in alignment for property investment. The two key factors, of many, are low interest rates and a housing market which hit a cyclical bottom.
However, the weight of evidence suggests that investors haven’t been jumping into the market and adding to their portfolios. So, sorry Bernard there is no great new rort for people to jump into.
There are many reasons why investors haven't taken advantage of the "perfect storm".
One is that banks haven’t been the most accommodating with finance.
Another is that the previous National-led government did plenty to discourage property investment. Don’t you recall the changes to tax rules which saw the end of LAQCs? Don’t you remember the removal of depreciation allowances?
All these, I would argue, have had a significant impact on investors and made many sell up. We talk to investors all the time and that is what they say.
The bit which is most galling is the simplistic and silly argument that we shouldn’t invest in rental property. Someone has to. The Department of Building and Housing says there is a growing trend for people to chose renting over home ownership.
Buying a property and becoming a landlord is the same as setting up a small business. This business has capital, it has debt, it provides a service (accommodation) and is 100% legitmate.
One of the biggest problems right now is the shortage of homes for New Zealanders to live in.
BNZ chief economist Tony Alexander reckons we are about 5000 houses short at the moment.
Who is going to provide the housing stock needed? Some will be individuals as owner-occupiers. Some will be investors or landlords. The group which isn’t likely to add to New Zealand’s housing stock is the government.
Former housing minster Phil Heatley has made this clear. Most of this slack will be picked up by private landlords and the social housing sector.
It is very simplistic to jump on the Act Party/ Hugh Pavletich argument the answer is to free up more land. Yes it may help, but it isn’t a one shot panacea.
The area with the biggest housing shortages and the most demand for additional housing is Auckland.
Part of the problem there is that there geographical characteristics of the isthmus constrain supply.
The Auckland City Council’s proposed plan is for more intensification rather than expansion of what is already one of the biggest cities (land area) in the world.
Sorry Mr D S Advocate, your argument is more about winding people up for fund (and traffic) rather than encouraging intelligent debate.
PS: Don't forget there is a capital gains tax and it is enforced. Indeed both Labour and National-led governments have provided millions of dollars to the PCP (Property Compliance Programme) and seen rich rewards for their investment.