Westpac warns house prices set for four-year drift as Government policy bites

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New measures aimed at property investors are likely to see house prices enter a long slowdown, Westpac says, forecasting ...

New measures aimed at property investors are likely to see house prices enter a long slowdown, Westpac says, forecasting a 5 per cent drop over the next four years.

House prices will slide over the next four years as new Government policies frighten investors out of the market, one of New Zealand’s largest mortgage lenders is warning.

Westpac has forecast that over the next four years, house prices across New Zealand will drop by 5 per cent, with a slightly larger fall centred around Auckland.

The predicted fall, in sharp contrast to the 30 per cent increase in nationwide house prices seen in the past four years, was expected to spill into the wider economy, as nervous households trim spending.

Auckland’s previously booming housing market slowed considerably during 2017, amid concerns around affordability and as global interest rates crept higher.

The new Labour-led Government has promised to take steps to improve affordability, both by increasing supply and potentially cutting some sources of demand.

As well as Kiwibuild, a state-backed plan to build 10,000 houses a year, Labour has said it will remove a loophole known as negative gearing, which allows investors to use losses on a property to offset other income reducing overall tax liability.

“We think Government policy is going to be……….

Continue reading this article at the original source from Stuff.co.nz

 

 

 

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2018-02-20T10:55:14+00:00