It's that time of year again: Budget time! There was a lot of good news, with the national chequebook set to move into surplus in 2015/16 and unemployment expected to drop below 5 per cent in the next few months. It's one of the biggest events of the year (and there's already been a fair few changes made in the past couple of weeks) so you're probably wondering how it's going to impact on your plans for residential property investment. So what has the government got planned?
Helping hand for supply
Alongside the measures to make sure investors are paying their fair share of tax, in his May 21 budget speech, Minister of Finance Bill English said the government's main focus would be boosting the supply of new homes in Auckland. It's little wonder. There's been quite a lot of concern about the lack of new listings and properties in the City of Sails. In fact, a report from the Ministry of Business, Innovation and Employment predicts that the city will need another 22,000 homes on top of the 50,000 target in the Auckland Council's plan!
To try and bring the difference down, the government has announced that will put aside $52 million and 420 hectares of land for housing developments on crown-owned land. This has certainly given the housing industry something to smile about, and home buyers can breathe a small sigh of relief.
With prices in the country's biggest city climbing rapidly year on year, there have been calls that something needed to be done – and the government looks to have been listening. The Property Council of New Zealand has given these measures a standing ovation.
"We absolutely commend the Government's attempt to address housing and want people to understand that infrastructure and land are at the heart of the issue," said Chief Executive Connal Townsend in a May 22 statement.
"This release of land for development to relieve Auckland's overheated market is real progress."
Whether you're just starting off on your property investment journey, or are looking to make the next step and add to your portfolio, the budget is just another reminder of how dynamic and exciting the housing industry is. Touch base with an Authorised Financial Adviser, like us here at Goodlife, if you'd like to find out why residential property investment could be a good move for you.
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