New Zealand Takes Aim at Speculators to Prevent Housing Bubble

New Zealand’s government took aim at property speculators with a suite of new measures to tackle runaway house prices and prevent the formation of a “dangerous” bubble, Bloomberg News reported. The government will remove tax incentives for investors to make speculation less lucrative and unlock more land to increase housing supply, Prime Minister Jacinda Ardern said on Tuesday. The moves come as surging house prices keep first-time buyers and people on lower incomes out of the market, raising concerns about growing societal inequality. “The last thing home owners need right now is a dangerous housing bubble, but a number of indicators point towards that risk,” Ardern told a news conference. “Property investors are now the biggest share of buyers, with the highest amount of purchases on record. Last year, 15,000 people bought homes who already owned five or more.” New Zealand’s success in battling Covid-19 has seen its economy recover sooner than many others, putting it at the forefront of a global property boom as ultra-loose monetary policies encourage investment in higher-yielding assets. House prices surged 21.5% in the year through February and investors accounted for more than 40% of purchases that month, a record high. Read more.

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