As developers, we've certainly noticed a surge in market activity over the past few weeks, a trend also echoed by our contacts in the real estate sector. The recent wave of regulatory changes seems to be fueling a sense of FOMO (fear of missing out) in the market.
Like many, we're keeping a close eye on market developments and continuously seeking valuable insights. We've identified three articles that are particularly relevant to our key customer segments and believe they will assist our customers in making more informed decisions.
TAX CUTS
Extra money in pay packets plus shake-up of home loan rules set to make buying easier.
Recent changes in tax cuts and borrowing rules in New Zealand could significantly boost homebuyers' and property investors' borrowing power. Tax cuts increase income, allowing banks to lend more, with first-home buyers potentially borrowing up to $21,500 more, and investors up to $32,000 more. The easing of the Credit Contracts and Consumer Finance Act (CCCFA) and loan-to-value ratio rules also contribute to increased borrowing capacity. Overall, these changes are expected to make it easier for Kiwis to obtain mortgages and invest in property.
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BRIGHT-LINE TEST
How July 1 changes to Auckland house buyers and investors?
In a significant move, the bright-line property rule will be reduced back to the initial period of two years for properties sold after 1st July 2024. This means for property sold after 1st July, any profit made will only be taxable if the property has been owned for less than two years (unless exceptions apply). This change is designed to stimulate the housing market by reducing the tax burden on short-term property investments.
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INTEREST RATES
Mortgage rates are already falling, sparking optimism among buyer！
With inflation decreasing faster than expected, New Zealand's Reserve Bank may cut the Official Cash Rate (OCR) soon. Major banks like ANZ are already reducing one-year fixed mortgage rates, anticipating further declines. Predictions suggest rates could fall to around 5.7% by mid-2025, easing financial pressures on homeowners.
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We trust that these articles will be useful in assisting you with making well-informed property purchase decisions. As the market continues to evolve, we are committed to bringing you timely and relevant insights to help you navigate these changes effectively. Stay tuned for our ongoing updates, and please feel free to reach out if you have any questions or need further assistance. We are here to support you every step of the way.
For more information, please contact us here.
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