The Government is delaying making housing policy announcements by a couple of weeks.
Finance Minister Grant Robertson had planned to unveil changes by the end of February.
But his office today confirmed announcements would be made in mid-March, as responding to community cases of COVID-19 last week pushed back other work on the Government’s agenda.
Furthermore, Parliament is in recess next week, breaking up two three-week sitting blocks.
While Robertson consulted with Treasury and the Reserve Bank (RBNZ) on curbing housing demand, interest.co.nz understands the mid-March announcement will also include some supply-side changes.
Further supply-side policy announcements will be made at the Budget.
Robertson is expected to make decisions on whether or not to give the RBNZ debt-to-income (DTI) tools. These would empower the RBNZ to restrict banks from lending to borrowers seeking a lot of debt compared to their incomes.
Robertson, like his National Party predecessors, is worried DTI restrictions could make it harder for first-home buyers to get on the property ladder.
But RBNZ Governor Adrian Orr a couple of weeks ago suggested it would be difficult to exempt certain types of borrowers from the rules.
Robertson is also expected to decide whether or not to change the RBNZ’s remit - either requiring it to factor house prices into the way it regulates banks or the way it conducts monetary policy.
Robertson in November proposed changing the Monetary Policy Committee’s remit to require it to consider house prices when lowering interest rates for example.
But the RBNZ swiftly hit back in opposition, suggesting it would rather be made to consider house prices through its financial stability arm/via the way it regulates banks.
Robertson is also expected to make a call on whether or not to extend the bright-line test beyond five years. Currently, people who buy and sell residential investment property within five years have to pay income tax on any gains made.
Given the Government has repeatedly said extending the bright-line test wouldn’t constitute a “new” tax, and thus wouldn’t see it breaking its pre-election promise to not introduce new taxes, there’s been talk an extension of the test could be on the cards.
Beyond this, Robertson and Housing Minister Megan Woods are undoubtedly considering other options.
Robertson earlier this month said: "We all know that building more houses, particularly affordable houses, is critical. But we also can do more to manage demand, particularly from those who are speculating.
"New Zealanders are seeing family members being crowded out of the opportunity to purchase a home of their own by speculators and investors. We want to tilt the balance more towards first home buyers, while also incentivising more investment in the construction of homes.”
The Government has stuck to its position that it wants house price growth to slow, but doesn’t want house prices to fall.