Labour won 49.1% of the vote, which equates to 64 seats in Parliament and gives the party the first ever outright majority under MMP.
That means Labour does not need a coalition partner to govern. Although Labour is in ongoing talks with the Green Party, this means the Greens are likely to have less power than last term.
While, at this stage, no major economic policy changes are expected under the new government, what could be in store for property investors?
NZ Property Investors Federation president Andrew King says it’s hard to make a guess as very little details of their housing policies were announced by Labour during the election campaign.
“But investors saw a lot of policy changes and new regulations directed at them over the last few years, so here’s hoping that this term there will be time for investors to stop and have a cup of tea.”
While it may not have been particularly detailed, Labour did release a housing policy and it points to several areas the new government will, no doubt, turn its attention to.
First up, the party wants to keep the construction sector moving in a bid to increase housing supply while stimulating the economy and creating jobs in the wake of Covid-19.
To that end, they plan to build 18,000 social houses by 2024 and repeal the Resource Management Act (RMA) to reduce the barriers to building new homes.
There’s few who would oppose this plan – especially given the country’s chronic shortage of housing, which ASB economists recently argued is more severe than previously thought.
King says that should it be successful he doesn’t think it will have a huge impact on the residential property market, or on investors.
“Boosting supply successfully does depend on how well it’s done. The RMA is a handbrake on getting development done so, hopefully, it isn’t reformed in a way where not much changes.
“Because we need to have a system which works effectively and is responsive to changes in demand. So that supply can be increased when it is needed.”
Another of Labour’s plans is to start regulating property management services to ensure they meet professional standards and a Code of Conduct.
This announcement was greeted with enthusiasm by a range of groups and organisations, including REINZ, which has long campaigned for property managers to be regulated.
King says that this policy coming to fruition is a foregone conclusion but, as yet there is no indication that it would be extended to landlords who manage their own properties.
“If they decide that we should be regulated, the NZPIF already has an education programme in place for self-managing landlords and we hope we could work with the government to make use of it.”
Finally, Labour also announced that it plans to review and amend the Unit Titles Act to provide greater transparency for people buying apartments or townhouses run by bodies corporate.
REINZ chief executive Bindi Norwell welcomed this plan. She says the current act is no longer fit for purpose in the current environment and is long overdue for review.
The last time the legislation was changed was 10 years ago, despite MBIE – along with others - raising concerns that the act needed to be brought into line with modern practices, she says.
“The fact that the act is on the list to be reviewed is welcome news for consumers, real estate agents, property managers, landlords and everyone working with bodies corporate.”
It’s worth noting that some of the Green Party’s housing-related proposals which have concerned investors, such as a wealth tax or a Warrant of Fitness for rental properties, are unlikely to make much headway under the new government.
However, going forward, investors will still have their hands full getting on top of the requirements, notably the Healthy Homes standards and the tenancy law reforms, introduced by the last Labour-led government.
Market correction? Don’t hold your breath.
Labour plans to regulate property managers