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Experts React To New Leadership

Experts React To New Leadership

We’ve canvassed a wide array of New Zealand property investors for their opinions on the result of the general election. Here’s what they had to say about our change of government.

By: Joanna Mathers

24 October 2023

There’s no doubt the election results are going to impact investors. The predictions of our panel are for the new government to bring in largely positive changes and that ‘more confidence’ will return to the market.

Sue Harrison, President NZPIF

My main feeling is relief. I feel like property investors are in a safe space again. A recent Stuff story (written by former New Zealand Property Investor editor Miriam Bell) revealed that 94 per cent of landlords owned one or two properties. These are the people that NZPIF represents, and they have been really stung by the changes the last government put in. These changes stung tenants as well as landlords – I do feel that tenants are also in safer hands with the new government.

Nick Gentle, Operations Manager And Co-Owner, iFind Property

The irony is if you look at capital gains, you will always do better under a Labour government. They are in the business of handing out money, and this floats around and eventually lands in property. It happened during the GFC, and with the Covid-stimulus packages.

[I’m happy that] the most damaging policies will be rolled back. I locked my mortgage in for five years, but if I hadn’t the combination of interest rates and interest deductibility removal would mean I would be paying $380 a day.

No-one with a professional involvement in property liked 90-day no-cause tenancy termination. It disincentivised landlords from giving marginal tenants a chance. Certain aspects of it work (security of tenure) but it will be good to see the return of some control to people’s own assets.

The CCCFA rules slowed me down significantly. They were meant to be used to stop loan sharks, but they weren’t meant to be used for property.

We have 7 per cent interest rates, so I don’t think the market will start running red hot post-election. Hopefully [this government] will help us go back to a normal market.

Sarina Gibbon, General Manager, Auckland Property Investors’ Association

I think the change of government is positive … with reservations. The clear positives are the changes to interest deductibility and bright-line. The question I have, however, is where in the priority list this will sit.

I prefer ACT’s approach [which sees them abolish bright-line and reinstate interest deductibility] immediately. Of course, we would love to see this “gone tomorrow”.

Landlords are happy to pay for changes that make sense for both parties (Healthy Homes legislation for example), but the interest deductibility removal just appeared punitive and has made things worse for tenants. It will be good to see that gone.

I have been excited around ACT’s approach to tenancy law. They have come up with the idea of a pet bond and they want to make it easier to terminate tenancies for antisocial tenants. Their policy allows for the removal of antisocial tenants after two complaints within one year, rather than three within 90 days.

Most of our members would like to see the 90-day no-cause tenancy reinstated, but I am in the minority here, and have a different view. This can breed distrust between landlords and tenants and revisit old grievances. ACT’s proposed changes are reasonable and moderate and tenants should be able to live with this.

I am looking forward to the end of scapegoating from the top. I don’t think ACT or National ever scapegoated tenants during their campaigns, and it will be good to see an end of one group being pitted against another. Hopefully, this will filter down to the general debate.

Landlords have become tired and demoralised, and we are looking forward to some positive change.

Ed McKnight, Economist, Opes Partners

I think the most likely outcome is going to be a National/ACT/NZ First government. There are 20 per cent of special votes left to count [at time of writing] and that’s around half a million New Zealanders.

New Zealand First don’t have a lot of housing policies (they didn’t have a clear stance on bright-line or interest deductibility). But what they don’t like is foreigners buying NZ property, so if they are in some kind of coalition or confidence and supply arrangement with National, foreign buyers for homes over $2 million may be taken off the table.

This means they may not get the full package for their tax cuts, but as Nicola Willis has promised to resign if tax cuts aren’t put in place, I think we can be sure they will still happen.

I think we will see more confidence in the market and property investors will start getting back into it. In the next 12 months there won’t be much difference for investors with regard to interest deductibility, but they can look ahead three years (when there will be 100 per cent deductibility) and plan their growth based on that.

Tony Alexander, Independent Economist

I feel the change of government will see extra upward momentum in the market. We have had five months of upwards momentum (starting from June) and we have seen investors returning to the market before the election. The change of government will just strengthen this uplift.

Interest rates have been a factor in slowing down the market; it’s affected residential home buyers and property investors, and this is likely to continue over the next year. I don’t see a massive lift in house prices in the short term.