Housing stocks returning to normal levels

Century 21

New

Zealand

owner Tim Kearins says the pressures on rental stock have only grown this year, not helped by the Auckland floods and Cyclone Gabrielle.

However, one ray of sunshine is the opportunity to successfully purchase a property.

REINZ’s latest nationwide real estate numbers showed the overall number of houses available for sale has returned to more normal levels, with sales transactions lifting in February.

Sadly, rents continue to head north. MBIE’s Tenancy Services Rental Bond Data released in March showed that median rents nationwide are up $175 per week since 2017 – reaching $575.

“Not only have thousands of Kiwis had their houses yellowed or red stickered, over 20,000 are on the public housing waiting list, and thousands remain in emergency housing including motels.

“This adds incredible pressure on rental property availability, and hence rents won’t be easing any time soon,” Tim says.

“This winter will be a good time to first-home buyers to purchase, if they can stump up a deposit and secure adequate finance.

“As well as finding a good mortgage broker, now’s the time to check out the government support schemes for many firsthome buyers, as well as consider a flatmate or border to help with debt serviceability,” he says.

The Century 21 leader says while the Reserve Bank’s decisions impact debt affordability, the government can change things to help tenants – such as bringing back tax deductibility on interest costs.

Once 100 percent of interest could be claimed as an expense by residential landlords, but that is now being incrementally phased out. Currently at 75 percent, that moved to 50 percent on April 1, to 25 percent April 1, 2024, and to zero on April 1, 2025.

“It’s a tough time for tenants, and for vendors it’s taking longer to sell properties. However, this environment also throws up opportunities for those considering a residential investment property, as well more choice for those looking to buy their first or next home,” Tim says.

He says tenants sick of paying skyhigh rents should do their sums on a mortgage calculator and then visit a broker to see what’s possible. They might be surprised.

“It might take some help from ‘The bank of mum and dad’ to cobble together a deposit, and you may have to rent out your spare bedroom to satisfy your banker or broker.

“Nonetheless, homeownership has proven time and time again, a great way for Kiwis to improve their standard of living and retire more comfortably.

“Now’s the best time in recent years for many to secure their future,” he says.