New Zealand’s general election on 23 September has left the final make-up of the Government in limbo, with neither Labour nor National able to lead without the assistance of Winston Peters and New Zealand First. Labour would also have to join with the Greens to make up the numbers, should Winston Peters decide to form a coalition with Labour.
Excluding the Special Votes – that won’t be counted until 7 October – Labour is on 35.8% (46 seats), National is on 46% (58 seats), New Zealand First 7.5% (9 seats) and Greens 5.9% (7 seats).
But even without the final votes being counted, New Zealand First’s “bottom lines” around housing and immigration will likely spill over into changes to the property market, Property Institute of New Zealand chief executive Ashley Church says.
“New Zealand First policy puts a big emphasis on getting young people into their first home – so I’d expect to see the LVRs gone or heavily reduced, as part of a suite of policies to achieve that.”
The party’s non-negotiables will likely include, among others, a ban or partial ban on the sale of New Zealand residential property to foreign buyers, and a reduction in immigration numbers.
While New Zealand First does not have a formal policy on the Reserve Bank of New Zealand’s LVR restrictions, Mr Church expects the current rules (where the majority of first home buyers need a 20% deposit) to be relaxed over the next 12 months.
But, despite the political uncertainty, property prices are not currently massively fluctuating and, instead are, maintaining a “holding pattern”, the latest Property Institute/Valocity Regional Insight Report.
The national median sales price has remained at $480,000 over the past 12 months, even though sales volumes have decreased by 29.3%, compared with August 2016.
“As predicted, there’s no ‘correction [to the property market]. Kiwis have just made an orderly retreat from the market while they wait to see what happens next.
“Based on the experience of 2011 and 2014, this slowdown is probably due to uncertainty around the election outcome – but there’s no doubt that LVR restrictions and credit rationing by the banks, have also played a part,” Mr Church says.
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