The new rules introduced late last year shrunk the pool of foreign buyers who were waiting for new IRD numbers. Thousands of new tax numbers have now been issued and data collected over the coming months will be more interesting and likely to be more representative of activity levels in the months leading up to the introduction of the new rules.
In this article on NZHerald just over a thousand homes were sold to foreigners during the first three months of 2016. Chinese buyers accounted for 29.5 percent however in Auckland they bought 58.2 percent of the 474 homes sold to non-residents. Property values in Auckland have risen again since March and they’re expected to keep rising over the coming months. The RBNZ say house price inflation particularly in Auckland and dairy debt pose the biggest threats to New Zealand’s economy.
Measures to tackle the rising property market including raising the existing LVR restriction on property investors may be implemented in some variation soon. Odds on property investors will be in the RBNZ’s line of fire especially in the Auckland market where BNZ’s Tony Alexander predicted a rise of the LVR restriction on Auckland property investment loans to 50 percent. It’s worth remembering property investment adds millions of dollars to the economy every year, supporting hundreds of businesses, therefore any change implemented will impact on local and national businesses providing products and services to the property market.
A land tax on non-resident buyers is one of the measures suggested to tackle rising property values even with evidence it hasn’t worked in countries where it’s been introduced including Australia.
This blog article was written for PropertyBlogs by Mobilize Mail.