Housing market in holding pattern as budget day looms
Budget unlikely to deliver new housing spend
With Budget 2025 set to be unveiled tomorrow, economists are warning not to expect a major new push on housing. 'They are already looking at the housing market in lots of other ways,' said Kelvin Davidson, chief economist at Cotality (formerly CoreLogic), pointing to a suite of supply-side initiatives such as the Going for Housing Growth programme, self-certification for builders and RMA reform.
In the meantime, the housing market remains relatively subdued – a cooling that has opened up opportunities for first-home buyers. Speaking to OneRoof's Catherine Masters, Brad Olsen of Infometrics noted that tight fiscal settings mean any additional housing spend would likely be 'tinkering around the sides'. Davidson echoed the sentiment: 'The market's functioning OK.'
Foreign buyer ban in the spotlight
While housing may be absent from the budget's main stage, speculation continues to swirl around one politically charged topic: the potential lifting of New Zealand's foreign buyer ban. Introduced in 2018 under Labour, the ban prevents most overseas buyers from purchasing residential property, with exceptions only for Australians and Singaporeans. Now, agents in the luxury market are hoping budget day brings a change, with some even claiming they've heard from politicians that a reversal is imminent, OneRoof's Masters reports – though Act's David Seymour said 'there is no decision I'm aware of'.
Still, pressure is mounting, particularly with the surge in applications under the revamped golden visa programme. US publication Bloomberg News (paywalled) quotes one agent reporting a 'tremendous amount of pent up demand' from wealthy Americans eyeing New Zealand as a haven. Many of them are already paying premium prices – up to $30,000 a week – to rent luxury properties here, reports RNZ's Rachel Helyer Donaldson. The surge in high-end rentals is the result of an emerging 'try-before-you-buy' strategy among clients awaiting clarity on the foreign buyer rules, an agent said.
Renters told they have power – but do they?
Outside of the luxury enclaves, the current rental market is described by many as a 'renter's market', with national rental listings at a 10-year high and landlords reportedly offering incentives such as a free week's rent or grocery vouchers. But the idea that tenants have their pick of great properties is far from the full story, writes Gabi Lardies in The Spinoff this morning.
Tenants 'are in no position of power at all', said Angela Maynard of the Tenants Protection Association, citing the reinstatement of 90-day no-cause evictions as a major rollback of renter rights. Laura Drew of Community Law Wellington added that while rent increases may be slowing, poor-quality housing and a power imbalance remain entrenched. The term 'renter's market', she suggested, offers little comfort to those stuck in unsafe housing or locked into unaffordable fixed-term leases.
Market hamstrung by planning and code constraints, says developer
Even as the government touts its deregulatory reforms, many in the building sector argue that core structural issues remain unaddressed. The most high-profile critic is Ockham Residential co-founder Mark Todd, who just gave a fascinating interview to OneRoof's Diana Clement about why our planning rules continue to stifle the development of high-quality, high-density housing in New Zealand.
It's not the RMA holding things back, but the Building Code, Todd argued. The code is 'an absolute regulation clusterfuck', he said – but most property developers like it that way. 'The Building Code as it is suits them, because they have no interest in building quality compact cities – they're in thrall to sprawl – and making the RMA a false bogeyman suits them too.'
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