A rental crisis is coming, says the Property Institute's chief executive. Ashley Church is predicting high rents will be the key housing issue this year — and government housing policies will "scare" some property investors out of the market.
"Some property investors will abandon the market and the impact of this, on the availability of rentals, will start to become a problem in the second half of 2018," says Church.
"There are always a number of less-experienced property investors who panic, and sell, when a market flattens — or who decide not to invest further during downturns.
"This means that an increasing number of rentals will convert to owner-occupied dwellings — putting pressure on the rental market at a time when the demand for housing is already acute."
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Church may have a point, but the upside is that if landlords start a mass sell-off, some people will be able to buy and get on their first rung on the housing ladder. However, there will be no "crash" in property prices, says Church. On the home loan front, he says long-term mortgage interest rates will rise.
"As was the case in 2017, the general consensus is that interest rates are on their way up — partly because of uncertainty around international events, and partly because New Zealand banks will need to pay more to attract a diminishing fund of investment from Kiwi depositors."
Change at Barfoots
Wendy Alexander, Barfoot & Thompson's CEO, will step down in two weeks.
Alexander has spent more than 30 years in the real estate industry, 20 of them at the firm. She is recognised across Australasia as a keynote speaker on real estate and business leadership.
Chris Dobbie, the firm's CFO, has been with Barfoot for 24 years and will step up to replace Alexander. The firm's accountant, Priya Shankar, will become financial controller.
Westpac economists reckon New Zealand's official cash rate will remain unchanged at its current 1.75 per cent until at least 2019. They don't expect it to change until 2020.