The formation of New Zealand's first coalition government involving National, Act, and NZ First has strong implications on property market regulation. Spearheaded by incoming Prime Minister Christopher Luxon, the coalition's policies are set to reshape the housing landscape.
Foreign Buyers and the Housing Market
A major change comes with the coalition's decision to scrap plans allowing foreign buyers back into the housing market. This policy reversal, a core NZ First stance, aims to stabilise the domestic property market by restricting foreign investment. The original plan, which was expected to generate significant revenue, had to be shelved, leading to a search for alternative funding sources for the coalition’s tax relief package.
Fiscal Adjustments Impacting Housing Policies
The coalition government has also made crucial fiscal adjustments. Notably, the decision to not raise the Working for Families abatement threshold and alter fees-free tertiary education funding reflects a strategic redistribution of funds. These changes, alongside plans to decouple benefit increases from wages and revert to inflation-based adjustments, are likely to have indirect but noteworthy effects on the housing sector.
Reforms and Regulatory Changes
In a move signalling a return to more traditional policies, the coalition has agreed on several reforms. These include scrapping the Māori Health Authority, Three Waters, and Resource Management Act reforms. Additionally, National's push to reintroduce 90-day work trials and abolish fair pay agreements and the social insurance scheme has been successful. While these measures primarily target other sectors, their ripple effects are expected to influence the property market dynamics.
Climate Commitments and Environmental Implications
Despite broad commitments to maintaining climate change obligations, the coalition has greenlit offshore oil and gas exploration. This decision, coupled with the removal of the climate change portfolio from Cabinet, could have long-term environmental and economic impacts, potentially influencing property development and market trends.
A New Phase for New Zealand’s Property Market
The coalition government's policy shifts mark the beginning of a new phase in New Zealand's property market. By focusing on domestic interests and making strategic fiscal adjustments, the coalition aims to create a more stable and sustainable housing environment. However, the long-term effects of these changes remain to be seen, with the potential to significantly alter the property landscape, and the decision making of landlords in New Zealand.
