The Government have announced their Budget for FY 2021. The key points on housing are:
- No changes to income tax thresholds until next year at the earliest.
- No additional funding for IRD investigation initiatives. $10million reduction for investigation activities. ($124million to $114million.)
- The Government is putting $3.8 billion into The Housing Acceleration Fund to increase housing supply. (This is the same $3.8 billion announced in the housing policy announcements in March.) The Housing Acceleration Fund aimed to increase the pace and scale of new house building by supporting the provision of infrastructure and housing and expanding the Land for Housing programme. The fund included investment to build affordable homes, either for rent or ownership. Funding would be focused on areas with high housing needs, including large Kāinga Ora projects. This is little help to First Home Buyers.
- Committing $57.3b to infrastructure spending over the next five years. That was an increase from $42.2b already on the books for infrastructure investment over the next four years. No immediate impact as all infrastructure work takes years to add to housing supply.
- $730 million to be spend on Maori Housing Initiatives, up to $380million of new money to build up to 1,000 Maori homes, and for a Maori Home redevelopment programme.
- No additional assistances to First Home Buyers, relying on policies announced in March.
- Expectation of the annual housing price growth to be falling from 17.3% in the June 2021 quarter to 0.9% by June 2022 as the result of the interest deductibility removal and extension of Brightline Test. No explanation on how, or outlining other measures to achieve this expectation.
- Valocity’s National Median AVM has risen from $645,000 to $830,000 over the past 12 months, representing 28.6% price growth over the last year. Should the annual growth be 0.9%, Valocity’s National Median AVM would be $837,000 in 12 months.
- Supply side constraint remains in the sector, 41,000 Building Consents for new homes were issued for the year ending March 2021, however, the shortage of labour and material may defer the completion dates for these homes.
For more information please visit valocityglobal.com or contact
James Wilson, Head of Customer Success, Valocity
Valocity is a Fintech company transforming and digitising the property decisioning process globally with customers across New Zealand, Australia, India and Asia.
Valocity combines the best of local property data with global technology and advanced analytics expertise to create models, insights that support data driven decision making.