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Moving Along

Election 2020 returned Labour to government but there’s likely to be less investorfocused changes this term. Instead it’s the challenges presented by the resurgent market that investors will need to address.

By: Miriam Bell

31 October 2020

It was all over quickly in the end. After what had started to feel like an interminable election campaign, one where even political enthusiasts were experiencing fatigue, on election night the result became obvious, fast.

The polls had consistently shown that Labour was likely to win – and win the party did. But decisively, in a landslide of red, which handed Labour the first ever outright majority under MMP. Unlike in the past, there will be no long, drawn-out negotiations to establish who can form the next government. For the next three years, Labour will be firmly in the driving seat.

Financial markets took the win in their stride: it was anticipated and no major economic policy changes are expected. So it’s business as usual in that sense. But what could the new Labour Government mean for the property sector?

Well, as our lead article last month suggested, the focus for Labour going forward will be on boosting supply. They have promised to repeal the Resource Management Act to reduce the barriers to building new houses. Neither of these policies are likely to bother investors.

In fact, most of Labour’s investor-focused policy changes were implemented (or not – in the case of a capital gains tax) in the party’s first term. This term there’s likely to be far less change for investors. In fact, the biggest changes for the property sector will be plans to regulate property managers and to review and amend the Unit

Titles Act. While the Greens returned a strong result, Labour’s outright majority means the Greens are likely to have less power than last term. That means some of their proposals, like a wealth tax or a Warrant of Fitness for rental properties, are not likely to make much headway.

So, at this stage, it looks like the biggest challenge for investors will not be government policies. Instead it will be the currently booming market, which is seeing prices soaring, and could according to some commentators – lead to the reintroduction of LVRs for investors.

It’s certainly not the market most thought we’d see with the advent of Covid-19. So in this month’s lead we talk to some experienced investors to get their thoughts on how to find a bargain, or a deal, in the current market. It should prove helpful to those keen to get on the ladder, or to build their portfolio.

While the spectre of big change may not be on the horizon for investors, this issue does mark a change for NZ Property Investor. It will be my last issue as editor –
I’m off to tackle some new challenges. But I have loved my time as editor, engaging with you – our readers, providing you with lots of (hopefully) interesting content to absorb, and learning a great deal myself along the way. I wish all of you the best of luck with your property journeys going forward.

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