On May 17, Minister of Finance Grant Robertson presented the first Budget by the Labour Government. A wide ranging and comprehensive document, Budget 2018 outlined a number of key financial boosts to many New Zealand sectors.
Of course, not everyone has time to read the full Budget which is why we've enlisted Lisa Barton, one of Money Empire's Registered Financial Advisers, to outline what it means for those considering investing in a property portfolio.
Was the Budget positive for investors and developers?
"For me, I think it was a positive budget for those looking to invest in property, and there are a number of reasons why," Lisa explained.
Lisa firstly cited the investment in transport infrastructure in both Auckland and Wellington. In addition to the $234 billion in funding for the Auckland City Rail Link, the government also set aside $50 million for metro rail projects in the capital.
"This will mean more services to the outer urban areas, in Auckland in particular. I believe this will support the investment and purchasing of property across the region," she said.
For developers and investors generally, the market is a bit stagnate at present – meaning the cost to build and on-sell is higher while margins are lower. This is resulting in 'land banking' until the market moves. What Budget 2018 presents is the potential to promote growth in new areas and stimulate developments for investors as well as first-home buyers.
Will Budget 2018 change the current buyer's market?
In short, the status quo will remain for now. Lisa explained that there are a lot of first-home buyers coming through the market at the moment, enjoying the current climate. This should only be enhanced by the Budget's provisions for more affordable and social housing, particularly in Auckland.
Over the next four years, the Labour Government has committed $234.4m of new funding to its KiwiBuild program which aims to build 6,400 new homes during this time.
"Obviously with the changes to get more affordable housing in the coming years that will hopefully see a reduction in the housing shortage. I think based on the Budget at the moment, it will help to tackle the Auckland housing market, but more is needed in the future," Lisa said.
The importance of keeping across political changes
Politics might not be everyone's cup of tea, but policy and legislative changes in Wellington can have a direct impact on the success of your property portfolio. This is why Lisa and the Money Empire team are always across these announcements and work to ensure you have the best advice possible based on market conditions.
To learn more about how to start your property portfolio, get in touch with us today – we look forward to hearing from you!