Interesting to note in this article that the Minister Of Housing reluctantly agrees with what I predicted last year.
I said that rents would rise because of ill thought tax changes to deprecation rules in last years budget.
If the Minister wants to know what so few people are buying state houses the answer is simple. Renting is (or was) cheaper than buying . Look at the facts in the article more closely. It is obvious that the housing shortage is worsening
As the queues for a state houses and rental housing get longer and longer, rents will continue to rise.
“A report by the Housing Shareholders Advisory Group last year found there was a 70,000 house shortfall across the country.”
Now why would that be? Would disincentives to supply rentals be a factor? You bet it is. The removal of depreciation from investment properties has greatly exacerbated an already chronic shortage and now the chickens are coming home to roost.
And just in case you think I am being political, housing under the last Labour government was made unaffordable for many as house prices doubled in just 4 years.
In a nut shell, investors should be buying up as much stock as they can sensibly afford. You don’t have to be a rocket scientist to work out that a shortage of rentals coupled with low interest rates, tax disincentives and an increasing demand can only lead to one thing: Higher rents- and that, my friends can only be a good thing for investors.
Housing under National
“National swept to power in 2008 promising to restore the “Kiwi dream” of home ownership.
It was to allow state housing tenants to buy their homes and enable first home buyers to build houses on sections provided for free for up to 10 years.
And it did just that. Unfortunately few people took up the offer.
To date 78 families have bought their own state house and just 32 plan to build houses on land provided under the Gateway programme.
It is now being scrapped, but Housing Minister Phil Heatley stands by letting tenants buy their own homes, saying it is funding 78 new state houses.
The Government now recognises it has to focus on programmes that help more people, he says.
Another of National’s election pledges was to retain existing tax rules and deductions for rental property owners.
That hasn’t happened; the Government has stopped property investors claiming depreciation on their buildings.
Mr Heatley admits many in the housing sector believe that increased rent prices.”