Give investors some answers

Milestone Homes: “Give investors some answers”

New Zealand's leading builder of affordable homes has slammed the government for fuelling insecurity among property investors – warning it will increase pressure for housing demand.

Stephen Murray, general manager of Milestone Homes, says: “For months now the government has been tipping changes to the way property investment is taxed. Its failure to provide any clear direction about those changes has damaged confidence in the market.”

His comment comes in the wake of a dramatic fall in the number of building consents authorised between February and March. The trend had been increasing since March 2009.

Stephen Murray says: “Large-scale developers and mom and pop investors alike have been holding back on building. They’re understandably nervous about putting money into bricks and mortar because they simply don’t know how May’s Budget announcement will affect their investments.

“And if they aren’t building houses, who will build the homes for New Zealanders we know the country so desperately needs?”

Last year the Tax Working Group recommended a number of options to curtail New Zealanders’ previous passion for property investment.

That’s not what the economy needs, at a time when the residential construction industry is one of the few sectors driving its recovery, Mr Murray says.

“The construction industry is worth billions every year. And we know the country is crying out for more affordable homes – the present level of house building is not enough to meet the growth in population.

“Yet the majority of market activity is being driven by existing homeowners and first-home buyers, rather than investors.

“Milestone Homes appreciates the work under way for regulatory reform in our sector, which will go some way to removing red tape around building new homes. At the same time, the government is undermining that work by tinkering with the tax system.

“We urge finance minister Bill English to give investors some answers, and put an end to the indecision, so we can get on with building the houses New Zealand needs.”

ENDS

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