What Investors Can Expect From Northland’s Property Market In The Second Half Of 2019

Good news on property investment in Northland:

• Rental yields to continue to rise (albeit from a low base), as rental growth continues at a steady pace of about 5% annually, and above the growth in average property values. This will be welcome news for investors, who are facing tax ring-fence for losses) – and investors don’t have to worry about capital gains tax anymore.
• Average property values still rising but in a restrained fashion, with the more affordable towns and cities in ‘regional NZ’ likely to record the largest increases in value
• We can expect loosening of the LVR rules in November, reflecting our expectation of steady market conditions. Possible options include lowering the owner-occupier deposit requirement from 20% to 15% and/or raising the investor speed limit for high LVR lending from 5% to 10%.
• We can expect banking sector competition to remain intense and ‘rate wars’ to be a recurring theme. This will be the case regardless of whether or not the Reserve Bank cuts the official cash rate again.