Otago Property Investors Association Inc

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News & Updates

Recent updates

20-04-2015

Political report for March/April 2015

 

The following is a summary of the political or regulatory news or comment affecting the residential property market.

  • Concern over heated housing market

  • Reserve Bank consults on the proposal to create a separate asset class for property investors and calls for a capital gains tax.

  • The Rules Reduction Taskforce has public meetings between March and May

  • Winton Peter’s win of the Northland by election affects the RMA amendments

  • Using 1947 regulations to enforce minimum standards prior to a Rental Property WOF

  • Providing compulsory Fire Alarms for rental properties

  • The debate continues over social housing and sale of state houses

  • An update regarding earthquake strengthening

Concern over heated housing market and need to dampen demand

Every month the REINZ and QV statistics show increasing house prices, particularly in Auckland, where prices have tripled since 2002.  Lack of supply and high net migration are said to be the main drivers.

Various interest groups are debating about what action the Government should take.  Government spokespeople point out that the Government is doing as much as it can to increase the supply of housing and this will ease the situation.  On the demand side, the LVR rules seem to have affected new home buyers more than any other group of purchasers.  However from the beginning of April, the Government is assisting new home buyers through the introduction of the KiwiSaver HomeStart Scheme and the Welcome Home Loan Scheme.

Reserve Bank moves

The Reserve Bank is concerned about the effect on the stability of the banking sector and economy if there is a severe downturn in the economy.  Consequently the Reserve Bank has put forward two proposals.  The first is to create a new asset class for property investors’ loans and require banks to hold more capital against these loans.  This could mean that banks would charge higher interest rates on property investors’ loans.  Consultation on this proposal closed on April 7 and it is understood that the new rules could be implemented by July.  The second more recent Reserve Bank suggestion was to bring in capital gains tax to deter property speculation.  This has stimulated a great deal of comment, much of it negative.

The Rules Reduction Taskforce public meetings between March and May

The taskforce is continuing its schedule of public meetings. Property investors and developers are invited to identify the rules which cause them difficulties

Winton Peters wins the Northland byelection

National’s loss of the Northland seat has changed the degree to which the Government can reform the RMA.  The Prime Minister has indicated he is not concerned about not being able to reform some aspects of the Act.  He is quoted as saying he does not think the reforms would have done a lot to address the Auckland housing shortage

Using 1947 regulations to enforce minimum standards prior to a Rental Property WOF

Researchers from Victoria and Otago Universities have written a paper saying that a 1947 law could be used to require landlords to provide housing that is free from dampness until a WOF for rental housing is implemented.  Here is the article

Media release from NZPIF can be found here

Compulsory smoke alarms

The NZ Fire Service has been calling for compulsory smoke alarms in rental properties. NZPIF President, Terry le Grove, and Executive Officer, Andrew King, met with Fire Service Investigation Manager for the New Zealand, Peter Wilding, to discuss the matter.  As a result, NZPIF members will be able to purchase smoke alarms through the NZPIF website from May 2015

lt has just been announced that landlords in the UK will be required by law to install working smoke and carbon monoxide alarms in their properties from October 2015.

Social housing and sale of state houses

This month the Salvation Army announced it would not be purchasing state houses as it did not feel it had the resources to manage a larger property portfolio.  A new organisation called State Housing Action Network (SHAN) has been launched and has warned social housing providers to reject offers from the Government to buy state houses.  They believe only Governments have the resources to provide housing for low-income families and others in need.

Earthquake strengthening

Minister of Housing Nick Smith is recommending local authorities do not make their final policy decisions on earthquake-prone buildings until the Government has finalised the earthquake prone building legislation.  This is only a couple of months away and the Minister has been working closely with Local Government NZ.  He is concerned to minimise the cost and impact on heritage buildings.

 If you would like to receive a weekly email with links to media comments on these and any other issues relevant to property investors, please email your request to the NZPIF Communications Officer at jan@janhains.co.nz

 

MINISTERIAL SPEECHES OVER THE LAST MONTH

25March - $500,000 boost for emergency housing providers Paula Bennett  Read more

26 March – KiwiSaver HomeStart Bill passes - Nick Smith Read more

8 April – State Housing Action Network comments unfounded - Bill English  Read more

14 April - Budget 2015 will be delivered on 21 May - Bill English Read more

15 April – Minister hits the road to promote HomeStart and Welcome Home Loan Schemes Read more

15 April - Social demand information released for the first time Paula Bennett Read more

 

 

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