scoop.co.nz 23 Mar, 2021 03:30 am

Bright-line Extension No Surprise, But Still Won’t Solve NZ’s Housing Affordability Issues Says REINZ

Bright-line Extension No Surprise, But Still Won’t Solve NZ’s Housing Affordability Issues Says REINZ
“We understand what the government is trying to achieve by extending the bright-line test to 10 years, however, we don’t believe this will be a magic bullet in terms of solving New Zealand’s housing affordability issues and nor will it do anything ...

If you are writing on today’s housing announcement, please consider the following comments from the Real Estate Institute of New Zealand (REINZ).All comments are attributable to Wendy Alexander, Acting Chief Executive at REINZ: “We understand what the government is trying to achieve by extending the bright-line test to 10 years, however, we don’t believe this will be a magic bullet in terms of solving New Zealand’s housing affordability issues and nor will it do anything to increase the supply of houses.“Currently, only 13% of properties sold across New Zealand fall under the thresholds, so this should allow more people to access the scheme and to take advantage of the support the scheme provides.“However, we were surprised, that some areas’ price caps will remain unchanged including Queenstown-Lakes, Waimakariri District, Selwyn District, Christchurch City and ‘the rest of New Zealand’.

Currently, only 12% of properties sold in the Queenstown-Lakes District fall below the $650,000 threshold and only 11% fall below the $550,000 threshold in Selwyn District so this may need some urgent reviewing before the 1 April changeover in order to bring those Districts more in line with other parts of the country.“In actual fact, what it’s likely to lead to is residential property investors holding on to their properties for even longer in order to avoid paying tax, thereby further reducing the total pool of properties available in the market.

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