The Kākā by Bernard Hickey
Thursday’s Chorus: Brace for a 20% price jump

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Thursday’s Chorus: Brace for a 20% price jump

REINZ data shows house prices bouncing in anticipation of National-ACT win; 1NewsVerian poll confirms National-ACT can win alone; In my view, residential land prices jump 20% on Oct 15 if polls right
The election may mark the definitive finish line for the house price slump, with already-rising prices expected to jump dramatically if National-ACT win. Photo: Lynn Grieveson / The Kākā

TL;DR: First home buyers and landlords are staring down the barrel of an immediate 20% jump in residential land values on October 15 if the last of a swathe of polls this week showing a clear National-ACT win on October 14 prove to be accurate.

REINZ figures out yesterday (full report below) confirmed buyers have a whiff of what land values would do after:

  • the immediate removal of interest deductibility for landlords’ tax bills;

  • the shortening the bright-line test for capital gains taxation for landlords from 10 years to two years;

  • immediately stopping Kainga Ora building and freezing public transport spending, which would also freeze multiple large rental property development plans;

  • allowing foreign buyers over $2 million back into the market;

  • tightening fiscal policy, which in theory should take pressure off interest rates; and,

  • further ramping up migration numbers from the already-record-high 96,300 in the year to July.

The open homes and auctions in the days of spring after a change of Government will unleash a wave of FOMO buying and unlock a swathe of sellers waiting for prices to return to the CV levels recorded at the peak in 2021, in my view.

Paying subscribers can hear more detail in the podcast above, along with the PDF of a powerpoint presentation.

The smell of blood in the real estate water

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