Lack of Government action to curb housing speculation has forced the Reserve Bank to announce new nationwide investor loan-to-value restrictions (LVRs) restrictions, the Green Party said.
The Reserve Bank has today released a consultation paper proposing changes to LVRs to lessen the risks to financial stability arising from rapidly rising house prices. These proposed new restrictions would take effect on 1 September 2016.
“The Green Party supports Reserve Bank actions to take some of the heat out of the property market driven by speculation,” Green Party finance spokesperson Julie Anne Genter said.
“It’s way overdue for the Government to show the same kind of leadership, and remove the tax advantages of property speculation.
“The National Government is still the property speculator’s best friend – this Government has made it easier to buy a third, fourth, or fifth house, rather than your first.”
The Reserve Bank has previously said that property speculation is a dominant feature of the housing market with property investor activity accounting for 43 percent of sales in Auckland and 38% in other regions. ‘The prospect of capital gains appears to remain a key driver for investors in the face of declining rental yields’, Deputy Reserve Bank Governor Grant Spencer said in July.
“Over 40 percent of all Auckland property transactions now involve investors and that number is growing,” said Ms Genter.
“Young New Zealanders trying to get into the housing market need political leaders to be brave and to back them -- cracking down on speculation is the best way to do that.
“In Government, the Greens would push for a capital gains tax on all properties except the family home, to encourage Kiwis to invest in more productive industries, and free up more homes for first-home buyers.
“The Green Party would also implement a Warrant of Fitness for rental homes, build more affordable homes, and restrict overseas buyers as part of a suite of measures to address the housing crisis.”