Believe it or not, we are already four months into 2019 (where has the time gone?) and about to head into winter – a season notoriously slow for property. But as we head into the middle months of the year it’s always good to look back to make predictions and to fully understand how the market is shaping up.
Government always has a major effect on the property market, especially one that has gone under ta major change, early on in its formation the government introduced the foreign buyers band which stopped overseas investors from buying property, almost a year on this has had a small, but not as significant impact on the market.
One of the biggest talks from the government in 2019 was the proposed introduction of a form of Capital Gains Tax. Many were expecting the government to adopt a watered-down version of the Tax Working Group report – possibly only applying the tax to investment property, which had suggested a heavy-handed Capital Gains tax on investment property, shares, business and some intangible assets.
But Prime Minister Jacinda Adern stated that no form of the tax would be going ahead, quoting that “all parties in the Government entered into this debate with different perspectives and, after significant discussion, (were) unable to find a consensus”
Many have predicted that it was tis proposed law that have kept some investors back from the market, which lead to the recent report that both first time buyers and Investors each accounted for 24% of property purchases in the first quarter of 2019. It will be interesting looking forward of this changes, and we see investors come back strong.
House Prices Dip – First Time Buyers Return
House prices in Auckland have taken a small, but not super significant dip in the first months of 2019. The latest data from property website Realestate.co.nz has indicated that people selling their homes in Auckland appear to be dropping their asking prices to meet the softer market conditions.
A report from CoreLogic has revealed that a factor in the dip in the Auckland market has less to do with weakness in the top or lower end of the market in all areas, but more about the areas themselves. The report revealed that the sluggishness of overall values has been centered in Auckland City and North Shore, with Rodney and Papakura as examples of slight continuous increase.
Experts have indicated factors such as the balance of unaffordability, buyer interest, availability of housing and access to credit and with first time buyers heading to more outlining suburbs that are more affordable and investors and those looking to buy in the city “have hit the limits of what they’re able to pay for housing”.
It will be interesting to see how these figures develop over the winter period, and if first time buyers can retain their market shares.