PHOTO: CHRIS GORMAN/STUFF Dominick Stephens expects house price inflation to pick up, then fade away again.
Westpac chief economist Dominick Stephens says the Government’s decision not to implement a capital gains tax (CGT) is a “tragedy for the efficiency and fairness of the New Zealand economy”.
He has released revised predictions for the housing market, and expects house price inflation to accelerate from 2 per cent at present to 7 per cent next year.
“The New Zealand housing market is currently cooling. Prices are falling in Auckland, and the pace of price increase is slowing elsewhere. But the cancellation of capital gains tax, combined with sharply lower mortgage rates, will be game changing.”
Nationwide, house price inflation has dropped from 16 per cent in 2016 to 2 per cent. That was initially led by Auckland and Canterbury but growth has since slowed in Northland, Bay of Plenty, Gisborne, Hawke’s Bay and Otago.
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