Government housing policies criticized by Bay of Plenty first-time homebuyers, rental agents and real estate investors

“[The government has] had this whole series of changes for investors, and then they approached these changes without much thought or analysis for first-time homebuyers, ”he said.

In 2016, the Real Estate Institute of New Zealand recorded the median house price in the Bay of Plenty at $ 495,000.

The latest data from last month showed it had jumped to $ 848,000 – a 71% increase in five years.

In Tauranga and Western Bay, the price cap to be eligible for a first home loan under government changes had increased from $ 50,000 to $ 600,000 for a new property and from $ 25,000 to $ 525,000 for a new property. existing property.

Taylor said the price cap for first-time home loans was too low and needed to be raised to keep pace with house prices.

“[It’s] not good enough by the government here, [it’s] really leaving Bay of Plenty first-time homebuyers out in the cold. “

Meanwhile, Tauranga Rentals owner Dan Lusby received agitated calls from property owners shortly after the announcement.

This included that of a landlord who decided to sell his rental property because he could not afford to keep it without offsetting his interest charges against his rental income when calculating tax.

He said first-time homebuyers from outside the region would grab rental properties in the market, but current local tenants were unlikely to be able to afford to buy property in Tauranga.

The average house price in the Bay of Plenty was $ 848,000 and would-be homeowners needed a deposit of $ 170,000 for it, Lusby said.

“In all honesty, it will be very difficult for them,” he said.

Lusby predicted that the changes would reduce the supply of rental properties and increase rents in the city.

Tauranga Property Investors Association president Juli Anne Tolley called the policy changes “ridiculous.”

“[The changes] sound like gut reactions, ”she said.

Tolley said changes to interest deductions in combination with the extension of the lightline test would trap real estate investors.

She thought investors – especially those who bought properties in the past five years – would have budgeted for a low interest rate.

She said investors would have to cover that cost with changes to the interest deduction, which in turn would see them selling properties and getting stung by the light line test in the process.

“Now they lose [money] and go back to what they were establishing five years ago, ”she said.

She believed that rents would increase with more landlords renting out their properties as vacation homes or short-term accommodation, which would reduce the rental supply.

“There will always be investors in the market, but this will narrow the field a bit.”

Meanwhile, Western Bay of Plenty Mayor Garry Webber praised the government’s allocation of $ 3.8 billion for a Housing Acceleration Fund that will be used to finance all critical infrastructure. necessary for the realization of a real estate development.

Webber wanted to focus on building affordable homes, like a KiwiBuild development in Ōmokoroa where the homes cost less than $ 650,000.

He said the properties sold very quickly to first-time buyers and he called for more price-controlled homes to be built in the West Bay.

“A house over a million is generally salable, but it is not for people at the bottom of the ladder who really need houses built to meet their needs.”

He supports increasing the light line test, saying it was only fair to tax capital gains.

Bay of Plenty national deputy Todd Muller said the policy had done nothing to increase the supply of homes.

Muller said this was the root of the problem, with housing developments in Tauriko West and Ōmokoroa tied to bureaucracy, while Pāpāmoa East lacked land.

He said a process bypassing the Resource Consent Management Act was needed in Tauranga, similar to what happened in Christchurch, and called for a special agency to be assigned to Tauranga to make it happen.

RNZ

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