It’s always difficult to know who to believe when it comes to the state of the Auckland apartment market. There are so many “experts”, all with conflicting views! There have been some developments, though, that we should all be thinking about and I believe that these issues could impact the value of our apartments here in the future!
In an effort to rein-in the explosive values of the Auckland property market, the Government, in its Budget 2015, has included proposals to strengthen the tax rules on property transactions and help Inland Revenue enforce them.
Their new regulations mean that any gains made from residential property sold within two years of purchase will be taxed at the seller’s marginal income tax rate unless the property is the seller’s main home, inherited from a deceased estate or transferred as part of a relationship property settlement.
The idea is to stymie speculative purchasers who the Reserve Bank sees as one of the major contributing factors to the massive acceleration of values in our market. These changes will take effect on 1 October 2015 and will apply to properties bought on or after this date. Theoretically, this could lead to overseas absentee investor/speculators withdrawing from our market in favour of the Australian market, remembering that our exchange rates are now almost on par and the wholesale exodus of these buyers would definitely have a negative effect on values! Exactly what the Reserve Bank wants.
The other factor worthy of note, in my opinion, comes from an article by the Herald’s Economics Editor, Brian Fallow. His research indicates that turnover last month was down 10 per cent on March last year and price growth is slowing, with the REINZ housing price index rising 2 per cent in the March quarter, half its pace during the second half of last year.
Without the benefit of a crystal ball, I suppose it’s anyone’s guess, but I do feel that it may not be a silly idea to test the market now if you have been thinking about selling your apartment. Last week and again last night, I broke more price records with my sales and I certainly want to maintain this momentum for as long as possible. I do have quality, qualified buyers for all styles of apartments here in “The Precinct” so, before they get tired of me telling them that I can’t find anything here, please do give me a call.
NO PRESSURE, NO OBLIGATION and NO EMPTY PROMISES.