What lessons could Australia learn from us?
We know we've got the better rugby team and that no matter whose name is inscribed on the cricket world cup, our Black Caps are a far more dignified bunch than the Australian team that defeated them in the final. Our Trans-Tasman rivalry echoes back through the generations, and covers every issue from our desserts to our most famous actors.
But when it comes to the laws around home loans and property investment, who has it better? We've both got major cities that are streaks ahead of the rest of the market in Sydney and Auckland, as well as concerns about housing affordability. But according to a prominent economist, we've got it much better here. How does that work?
Taking a leaf out of our book?
Speaking to Bloomberg in a May 28 article, AMP senior economist Shane Oliver discussed our local market and the things we're doing that Australia should be looking at a little more closely.
"New Zealand's approach has been lot more direct and tougher, whereas here it's about having a chat with the banks and expecting changes," he stated. This is in reference to a flurry of investor lending, with the Australian Prudential Regulatory authority noting that investors' market share of lending has gone up by $49.8 billion over the year to March 31.
Meanwhile, the Reserve Bank of New Zealand (RBNZ) recently proposed new conditions including minimum LVR thresholds of 30 per cent for Auckland – it's action that might not please some investors, but where there's a cloud, there's always a silver lining.
New Zealand spreads its wings to lead by example
One point raised by the RBNZ was that with a higher limit on LVR borrowing outside of Auckland, property growth in regional areas could take off. It makes for great opportunities when you want to get into property investment in Hamilton or elsewhere in the north island, where you could still see some great capital gains and positive cashflow.
I mean, if the measures are the envy of Australia then we must be doing something right, surely? The goal here is financial stability, and it could have the bonus of being able to get you into a financially enviable position as a home owner in regions not far removed from Auckland – if these come to pass.
For more information on how enviable our market can be, as well as the right investment advice, don't hesitate to get in touch!
Here's to your financial independence!
Authorised Financial Adviser / Investment Property Expert
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