While New Conservative appreciates the initiative taken by certain banks to raise the deposit required by investors to 40% to be eligible to apply for a mortgage, we believe it is the role of government to control property speculation which is inflating the price of houses.
While these measures may slow the investors down a little, they will find a way, because they have the equity to do so. It would also be interesting to know what the banks’ policies or criteria are on what constitutes an investor.
A number of years ago Singapore made some drastic changes to curb foreign ownership of apartments and also to curb investors from being driven by their own greed, creating property speculation. These changes, introducing targeted Stamp Duty, had an immediate effect, property values stopped rising, and first home buyers had greater opportunity to purchase their security for the future.
New Conservative has adopted a similar approach in our policy. Our Housing Policy states: “We would introduce Stamp Duty on property purchases by non-citizens, and on the third and any subsequent purchases by local investors.”
This does not penalise a family from having a home and a bach or another property as an investment, but it would discourage those speculators who are primarily in the business to make big returns at others’ expense by effectively increasing the price for them. New Zealand is one of just a few countries which have no stamp duty of any kind.
With the recent announcement that the government will address this issue in the May budget, New Conservative encourages them to consider this very effective method of bringing some sanity to the housing market.
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