NZ PM tackles Property Speculation to cool Housing Crisis

Being amongst the first countries to recover from the pandemic, New Zealand saw a leap in global property investment. Housing prices increased by 21.5% in the month of February, with 40% purchases belonging to investors.

“The last thing homeowners need right now is a dangerous housing bubble, but a number of indicators point towards that risk. Property investors are now the biggest share of buyers, with the highest amount of purchases on record. Last year, 15,000 people bought homes who already owned five or more.” said Jacinda Arden. These surging housing prices have kept first-time buyers and the low-income population out of the market which creates a risk for social inequality.

In an attempt to make speculation less profitable, the government will remove tax incentives for investors. The government will eliminate the ability of investors to use mortgage interest for reducing taxes. A $3.8bn plan has been announced to unlock more land for housing development. This will also make first home grants accessible to more.

“Removing deductibility for investors will dampen speculative demand and tilt the balance towards first home buyers,” said Grant Robertson.

The five-year period in which profits on the sale of investment property is taxed has been increased to 10 years. This will apply to all properties bought after 27 March and from 1 October investors will not be able to deduct mortgage interests. “The housing crisis is a problem decades in the making that will take time to turn around, but these measures will make a difference.” said the 40-year-old PM.

The government is also aiming to increase housing supply while reining demand. The supply has been constrained by high construction costs and planning rules. “There is no silver bullet, but combined all of these measures will start to make a difference,” said Arden.

Do you want to publish on Apple News, Google News, and more? Join our writing community, improve your writing skills, and be read by hundreds of thousands around the world!

Source: Bloomberg

Latest Stories – News Landed

+ Europe restarts use of AstraZeneca vaccine
+ Amidst protest, Turkey pulls out from the Istanbul convention

Related Stories

The struggle of various economies around the world due to the current pandemic

The Covid-19 pandemic has affected a major part of people's lifestyles. As a result, there have been various changes...

Another variant of the COVID-19 virus emerge in Washington

The pandemic is still seeking attention all over the country. The vaccine produced is efficacious, but there is no...

Featured Stories

North Korea’s nuclear test sparks conflict

The United States of America, Japan, and South Korea have collaborated to pressurize "North Korea's nuclear and ballistic missiles...

The molecular underpinning of stem cells to form the kidney seeks attention by the scientists

The mammalian kidney is a distinctive organ, that evolves on basis of an interplay between epithelial and mesenchymal tissues....

Nike blocks all sales and gets a restraining order against rapper Lil Nas X’s ‘Satan Shoes’

Nike has quite literally fought against the devil, trying to get the 'Satan Shoes' to be stopped from being...

Discovery of a new type of black hole bridges the gap between Stellar and Supermassive black holes

A black hole is a region in space where gravity is so strong that no particles, including electromagnetic radiation,...

Goldilock protein which sets for proper immune response remains known, researchers say

There are certainly a lot of abnormal actions produced by the immune cells. It can be of any autoimmune...

A golden mask discovered in China dating back 3 thousand years

A number of Chinese archaeologists have been able to find an archaeological discovery described as historical, while they are...