First home buyers have the advantage as investors hit pause on buying spree
Investors appear to have hit pause on new purchases as they come to terms with the Government’s housing shake-up.
Last week the Government announced that it was extending the bright line test on investment purchases to 10 years and changing the tax rules around interest costs.
Tom Rawson, director of Ray White Manukau, in South Auckland, where investors have been highly active in the last six months, said the last time there was so much uncertainty in the market was last year, when the Government put the country into an alert level 4 lockdown to combat Covid-19.
Investors, he said, would be hitting pause while they assessed the ramifications of the changes. As of last week, buyers will be unable to deduct interest costs on mortgages for new investment property purchases, but there will also be gradual reduction in the ability of those already owning investment properties to deduct such expense over the next four years.