Government change, All Blacks' triumph, and inflation relief in 2023
A change of Government, an all-time classic win for the All Blacks, and some great news that the inflation monster is being tamed and rates have likely peaked should hopefully create some goodwill around the country after what has been a pretty challenging 2023 for many people. Firstly, on the investment front, I won’t get too deep into politics and focus on this from a property investor’s point of view.
Real estate numbers have clearly shown that both prices and sentiment have ticked up over the last few months. Still, first-home buyers have mainly led this, with investors generally staying on the sidelines. Rhetorically, the general feedback we have been receiving is that most have wanted to wait until after the election, which was a pretty fair call as not many would call the outgoing Government ‘investor friendly.’
Property listings have also been low, so it will be interesting to see if there is a surge now that we have a bit more certainly how the political landscape will look regarding who will run the country, although some may wish to get a bit more understanding on exactly how National, Act and NZ First will make this work.
While we need to see the fine print, we can expect some version of the following changes:
- Repeal of the non-interest deduction rules regarding mortgages
- Reduction of the timeframes around Brightline taxation
- Reinstation of the no-cause eviction ban regarding residential tenancies.
- Removal of the Reserve Bank dual mandate, so their main priority again is inflation.
- Repealing the CCCFA changes should bring back more common sense around obtaining finance.
All of the above have positive impacts for property investors and should give some confidence back to existing landlords and those considering becoming investors.
In other news regarding interest rates, the 17th of October was the key date the Reserve Bank would have been keeping an eye on to decide whether to raise the Official Cash Rate (OCR) and thus mortgage rates at their next review on the 29th of November. They had been expecting inflation to be around the 6% mark, and with it coming in at 5.6%, this was well under what almost all commentators and experts had predicted. This may result in a small drop flowing through to mortgage rates in the coming weeks as most banks had already baked in a higher inflation result than this, which may result in a drop in the cash rate earlier in 2024 than had previously been expected.
For those who want to be ready to purchase or alternatively want to see what their ability to access mortgage funding is, feel free to touch base HERE where, for no cost, we can review your position and, if you wish, assist in getting you ready to be able to invest.
I am looking forward to coming down to talk at Property Brokers HQ in Palmerston North in a couple of weeks on Thursday, the 2nd of November, at 6 pm. I will be talking alongside Property Brokers General Manager David Faulkner about the opportunities that exist now that the election is over. If you haven't yet registered to attend this evening, be sure to do so HERE.
Hopefully, by that stage, we will also be celebrating another Rugby World Cup Final win!
