Last night I hosted a live Q&A with expert property accountant, Tony Thorne, covering yesterday’s announcement of the new housing package from the Government. A package of changes in an attempt to address housing unaffordability in New Zealand.
Check out the recording from last night’s webinar addressing what impacts property investors will face:
My thoughts on the impact of these changes on first home buyers:
The key changes announced yesterday from the Government are below with my thoughts on how these affect first home buyers:
“Removing barriers holding up the building of new homes. We’re launching a $3.8 billion Housing Acceleration Fund, which will speed up the pace and scale of house building and jumpstart developments by funding the vital infrastructure like pipes and transport links needed for new housing.”
This is a good initiative.
“Incentivising investment in new builds, which will help drive demand and ensure more houses are being built.”
Good plan to encourage more new builds
“Making it easier for first home buyers to get into a property, by lifting the income caps on the First Home Loan and First Home Grant programmes so more people can access this support.”
This won’t help much for first home buyers, as the biggest issue is the deposit requirement. The Government could look into an option similar to student loans, by lending them back the percentage of the tax they have paid, as the property value goes up, they can repay the loan later. So instead of the home grant which is not that much helpful, this way could help more first home buyers get into their own home and the taxpayers money being repaid as well.
Ultimately, education is where we should focus our efforts. A lot of kiwis are not aware that they can own a home, this includes politicians, if the officials are renting, how are they going to increase home ownership if they don’t understand it and how are they going to convince people that they can own their home.
If teachers have been working for a number of years and still renting, how can they teach our young generations that they can own a home and value of prioritising it? Education is key and we would love to see the government focus on the education around home ownership.
The current increase in income and house price caps would only give the developer reason to raise their prices.
“Helping to tip the balance in favour of first home buyers by extending the bright-line test from five years to 10 years, and by closing a long-standing tax loophole that benefits property speculators.”
During our lives, we have to rent somewhere, this could be the early stage of our working life, relocation, separation etc. Property investors play an important part in providing housing stock to keep the rent costs down. They are not the speculators, property traders who buy and sell with intent to make profit, perhaps raise the tax to be paid instead, increasing the Brightline Test to 10 years will not stop property traders.
“Making sure we have the skilled workforce we need to build more houses, by extending our Apprenticeship Boost payment, which has already enabled businesses to take on 21,000 apprentices.”
This is Wonderful.
Our clients focus on strategies that minimise the impacts of changes like these, so have no need to worry about yesterday’s announcement. If you want to know how to continue to invest in property, or looking to buy your first home and want to avoid making a mistake that could cost you hundreds of thousands of dollars, make sure you head along to my next ‘How to Buy or Invest in Auckland Property Workshop, click here to find out more.