Investors ditch old houses for new ahead of taxes and standards

By RNZ

Property investors are selling off older properties to buy newer ones as they look to manage investments against changes to tax rules and healthy homes standards.

Hamilton-based Lodge Real Estate managing director Jeremy O’Rourke, said the trend has been noticeable over the past few months.

Government is proposing that interest on a mortgage on a residential investment property acquired before 27 March this year will be phased out gradually until 31 March, 2025.

O’Rourke believed the investor trend will continue for the time being.

“Markets continue to show strong demand and there’s competition for houses – that was one of the most interesting points we’ve noted over the past few months, the sell down of investor stock and we saw that coming out of our own rental portfolio as well.

“But at the same time the portfolio is growing and it’s because investors are rebuying [newer stock].”

O’Rourke said it’s too early to see what effect the Official Cash Rate rise will have on the market.

“We certainly haven’t yet seen people spooked by the OCR increase. This may be because we haven’t seen the full flow through to interest rate rises at the retail banks yet but ultimately, we still have a lot of people wanting to move to Hamilton.”

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