The Greens want to make it harder for real estate investors to get a mortgage and make them pay capital gains tax every time they sell a house.

The Greens want the government to give the Reserve Bank new tools to deal urgently with the boom in loans to real estate investors.
Photo: RNZ / Nate McKinnon

The party has released a four-point plan that it says will help stop a mounting housing crisis that continues to grow. exclude ordinary New Zealanders from the market.

It comes as Finance Minister Grant Robertson is expected to announce policies to address housing supply issues next week.

Greens Finance spokeswoman Julie Anne Genter said her party’s plan called for bold and transformative measures, including remove tax incentives for investors by dropping the five-year cap for light line testing.

“Anyone who sells residential investment property that is not their primary residence should pay income taxes.

“Any extension of the ceiling, to 10 or 15 years for example, only throws the box in a few years, while real estate investors will keep their properties until the day after the end of the light line test,” he said. she declared.

The Greens also want to regulate investor access to loans by ending interest-only mortgages, requiring cash deposits rather than mere equity from other homes, and placing restrictions on debt / ratios. income – something that Reserve Bank Governor Adrian Orr asked the government for.

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Greens Finance spokeswoman Julie Anne Genter said it was time for the Labor government to remove tax incentives for investors to buy property.
Photo: RNZ / Dom Thomas

“The government must equip the Reserve Bank with new tools to urgently deal with the boom in investor lending, which is excluding first-time buyers from the market. the bank does not use them, then the government has to step in with ministerial directives under the Reserve Bank Act, or even legislation.

“Debt-to-income ratios should be allowed and used to slow the leveraged and risky mortgages that underpin real estate speculation. New requirements for real estate investors to have actually saved on a cash deposit, rather than leveraging equity from other properties, would help level the playing field with first-time home buyers, ”said Genter.

The Greens also urge the government to provide direct economic stimulation in the form of income support, rather than relying on the Reserve Bank, and call for a massive urban redevelopment and housing construction program led by Kāinga Ora.

“Kāinga Ora must be properly supported to acquire land and redevelop it into thriving and accessible communities, with affordable housing, green spaces and clean transport links. This means raising Kāinga Ora’s debt limit and working with them. community housing providers and iwi to build more long-term rental housing and papakāinga housing.

Kāinga Ora should aim for at least 5,000 new constructions every year until supply matches demand and prices stabilize at affordable levels. After that, he should be mandated to maintain a constant pipeline of development. of housing to meet expected population increases, ”said Genter.

House prices are expected to rise again this year – Kiwibank

The restrictions on the loan-to-value ratio have been reintroduced in March, and from May, investors wishing to buy investment property will need a 40 percent deposit.

However, Kiwibank chief economist Jarrod Kerr said house prices could increase by 25-30% at its peak this year if stronger action is not taken to tackle the housing crisis.

He said tightening the LVR may not have as much of an impact on investor activity as hoped, and more measures are needed to tame the housing market.

Kerr said Morning report the Reserve Bank and the government needed to redouble their efforts to deal with the chronic shortage of supplies.

“We know what we saw last year is not sustainable, we don’t want house prices to go up another 10.15, 20% from here, but that’s what we will probably have this year.

“Given the momentum we have, given the loans that we as bankers are writing right now, there is still momentum in the market, and house prices will go up 25-30% d ‘here the middle of the year.

“We have to cool this down, we have to slow it down and deal with the problem in the market that we have a shortage.”

But if investors were completely shut down, the rental real estate market would become tighter and rents could rise as well, he said. Instead, he would like investors to be encouraged to invest their money in quality new construction.

“[It] would be a good way to channel resources towards the effective increase in the housing stock.

“But New Zealand’s problem is that we haven’t released enough land, we have a lot of it, and the ability to build a house is limited by resource costs, material costs, consent processes – it is very difficult to build houses in New Zealand, does not have to be. “

Kerr said a good example of dealing with the problem can be seen in Australia, where they faced a similar problem and decided to move resources from mining to housing, which lowered prices in higher density areas where there was an oversupply.

“To me, that’s what you’d like to see. You’ve actually seen an under-supplied market become slightly over-supplied in some areas and the affordability of the market has improved.”

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