Housing minister Phil Heatley told property investors they got off lightly in this year’s Budget.
He acknowledged the changes the government has made to depreciation and LAQC rules caused a lot of negative reaction from investors. However he told the NZ Property Investors Federation's annual conference in Blenheim that investors got off lightly.
"You got off reasonably well."
If a Labour government won the previous election then investors would have had a capital gains tax regime plus a land tax, he says
Heatley says the government is supportive of residential property investors and wants to make it as easy as possible for landlords.
Changes to the Residential Tenancies Act strike a good balance between landlords and tenants, while the earlier version of the revised "was too far away from personal responsibility."
Heatley says the government supports property investors, because if the private sector wasn't housing people then the government would have to.
"We want to make investing in housing as easy as possible."
Heatley says the government measures its decisions on policies by supporting changes which encourage business and savings and discourage spending and borrowing.
As for the housing market Heatley's personal view is that in the medium term (two to five years) that house prices will rise.
His reasoning is based on supply and demand.
Before the recession New Zealand needed to build 23,000 new dwellings each year. The rate was around 20,000 then but has fallen back to 12,000 and 17,000 in the past two years.
He says we are well behind and there is pent up demand for houses.
He says the areas which will see price rises are the ones where there is no land to build on, such as Auckland.
Heatley says there is plenty of land available in his Whangarei electorate so it is unlikely to see price rises.
However later in the conference ANZ economist Khoon Goh gave a run down on economic factors impacting housing.
"I do not believe we have a housing shortage," he says. During the boom a lot of houses were built and the market is still absorbing that surplus.