With the recent election now behind us, the spotlight has shifted towards focusing on the potential impact of the incoming coalition government on the property and lending markets.
In their pre-election manifesto, the National Party, led by Christopher Luxon, made several pledges to voters, outlining their plans for the property sector. These included commitments to:
Restore Mortgage Interest Deductibility: The party aimed to gradually restore full mortgage interest deductibility for property investors. This would increase from 50% in the fiscal years 2023-24 and 2024-25 to 75% in 2025-26 and ultimately reaching 100% in 2026-27.
Adjust the Bright-Line Test: National proposed revising the bright-line test, reducing it from the current five or ten years back to a two-year period.
Simplify Planning Rules: The party envisioned streamlining planning rules and making resource consents for houses more affordable and quicker to obtain.
Promote Competition in Building Materials Market: National aimed to increase competition in the building materials market, potentially leading to more affordable housing options.
Unlock Land for Housing: The plan included unlocking land for housing, intensifying transport corridors, and investing in infrastructure to facilitate housing development.
Support the Community Housing Sector: National pledged support for the community housing sector, aiming to foster growth and provide additional accommodation.
Overseas Buyers Tax Partially Repealed: The party proposed a partial repeal of the ban on non-citizens buying local real estate. Non-citizens would have the opportunity to purchase properties valued above $2 million, subject to a 15% buyer tax.
Generally for many Kiwi’s and NZ businesses, major financial decisions are often put on hold leading up to an election as they await clarity on the future landscape. With the election now done and a clearer direction in sight, there may be an uptick in property buying and home loan activities. Do we expect to see a surge in the property market? It’s unlikely there will be sudden dramatic changes, however we do expect to see things slowly start to pick back up, especially in 2024.
If you're considering purchasing a property or refinancing an existing loan before the year's end, it's not too late to initiate the process. Feel free to get in touch with us today to discuss your options and kickstart the journey towards your property goals.