PHOTO: NZ Landlords
Many small property investors have taken a break from participating in New Zealand’s housing market a few months after the government introduced reforms to cool the market, according to mortgage advisers.
Craig Pope, a mortgage adviser at Loan Market Wellington, reported that he had seen “60% less investor loans” in recent months. However, recent investor activity was balanced by a rise in successful FHB activity.
“I think investors are reaching a point where it’s just too much debt to keep leveraging,” Pope said, as reported by Good Returns.
Glen McLeod, the director of Edge Mortgages, noted the same trend in the New Zealand property market, particularly among investors who have one or two investment properties.
“The hardcore investors don’t seem to be too bothered by the changes,” McLeod said, as reported by Good Returns.
In March 2021, the government announced a housing package to deliver a more sustainable housing market in New Zealand. It featured a $3.8 billion housing acceleration fund, access to first-home grants and loans with increased income caps and higher house price caps in targeted areas, a bright-line test extension, the removal of the interest deductibility loophole for future investors, as well as the phasing out of existing residential investments, government support for Kāinga Ora to borrow $2 billion extra to scale up land acquisition to boost housing supply, and the extension of the Apprenticeship Boost initiative to further support trades and trades training.
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