Yes. That is correct.
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Not quite sure I understand where this pessimism is coming from. Most analysts think that the impact of the governments latest house price package will be moderating the market, but only modestly.
Interesting to look into todays data wrap released form the ANZ research team. They think that the latest announcements might push house price inflation down by roughly 2 % per year - which would mean for the current year only 25% house price inflation instead of the originally estimated 27%.
https://publications.anz.com/Singlet...0-16c65a8eded5
Given that I am not sure the link will work - here is the relevant graph:
Attachment 12391
Now, I don't like the way how the government introduced this change either and there are clearly fairness issues, but from the economic impact (and the impact on house prices) I don't think this means the end of the world is nigh ...
I don't see the latest tax changes impacting significantly on OCA or any other retirement village provider, and people will grow old and need care as before this announcement ...
As far as house prices are concerned ... I think the measure is likely to take the edge of the currently absolutely crazy house price inflation, and this is a good thing.
And how long will it take to see any results from the latest Govt package ? (factoring in Govt's past success rates
with jumping on the problem and actually throwing just a few walls on a block of dirt ) .. ;)
Let's give credit for their ability to jump on wrong end of issues & opposite happening, like a see-saw high into the sky .. ;)
Maybe Miss Muppet can hold the thing down & scream more loudly than the earlier drone .. ;)
Not related to OCA directly, but relevant to valuation of its property. Deductibility of interest shouldn't put a long term damper on property prices. While not deductible against income, it will be deductible against bright line tax as a holding cost. One way or another it will be deductible. So for investors who want to sell within 10 years, it shouldn't be a real burden, or have I got it wrong. If I am right the effect on property prices may not be as great.
My take on this is - there may be an element of factoring in tax cost of non deductible interest flowing to rents
That will at least see prices maintain if not rise - given all the additional risks politicians have added into
the basket
Mum & Dad investors where possible may be looking at exiting for easier investment classes without the risks
The news wont be good for Renters - add more property coming out of rental stock onto the market
Speculators & potential investors will think twice = less new Property Investors with stock for renters.
Longer lead time for Govt funded initiatives to see fruit & add to basket of rental stock
Longer Queues for rentals
More homeless
More demand for reduced number of available stock - short to medium term - at higher rates
Short term the answers suggest Govt's further meddling has once again shot Renters badly in both feet
- the exact opposite of what they were trying to solve .. like earlier attempts at meddling
The private element in the Property market is as if not more important than Govt's presence
Reduce one - short term major pain & the other has to tip wholesale bucks in to bridge the gap .. ;)
And of course the Good Old Taxpayer gets to lump the final large bll for all the mindless meddling all the
way along ..
Have I summed it up correctly or missed anything ? ;)
"Have I summed it up correctly or missed anything"
and send that to the Pm
but what effect will it have on OCA and sector if any...?
https://www.interest.co.nz/property/...+26+March+2021
Its difficult to come to any other conclusion than the tide has turned, or is about to turn.