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Q+A: CoreLogic's Jonno Ingerson interveiwed by Corin Dann

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Fuseworks Media
Fuseworks Media

CoreLogic’s Jonno Ingerson: A risky time for first home buyers to be getting into the Auckland market. ‘Be careful’

The Director of Research at CoreLogic Jonno Ingerson told TV One’s Q+A programme, ‘if it was me, I’d be starting to get a little bit nervous about what the future holds for the Auckland market. Can it keep going like this? I don’t think so. Do I think it will calamitously collapse? No, but probably more likely we’re going to see a period in the future of there might be a short dip and a period of flat growth. It’s a risky time, I think, to be looking to get into the Auckland market. There’s so much attention on it, so much intention to try and slow it down. Be careful.’

Jonno Ingerson told Corin Dann the reason he’d call this market a bit scary is that for many investors it’s about capital gain not rental yield.

‘And if you look at Auckland, the most common length of time for an Aucklander to hold their property for is less than one year, followed by two to three years, followed by one to two years, and then eight years, which is kind of normal in a market. Eight years is a distant fourth. So you’ve got this activity happening in Auckland of people buying and selling property really quickly. Why? Well, it’s not just investors. There’s all sorts of people that go, ‘Because the market is increasing, I can make some money off it. I can move around in it.’ It becomes self-perpetuating. That’s the bit that as an economist looking at this you’d say, ‘That’s the bit I’m worried about, that speculation.’

Jonno Ingerson told Q+A that the Government’s bright line test doesn’t seem to be deterring speculators.

CORIN Well, that’s interesting too, because that suggests, say, that the bright line test that the Government brought in, which was to say, ‘You sell within two years, that’s a clear line there. You have to pay your tax on your capital gain,’ that’s not deterring people.

JONNO No, and if you look at the people that that was targeted at, which would be the speculators, if you like, that are driving the market, turning it over quickly, a lot of them were doing that as a business anyway.

CORIN And paying tax, presumably.

JONNO And paying tax. Quite happy for the IRD, sure, yeah, ‘I bought and sold, and I’m paying you my big block of tax.’ The people it was aimed at were those that were skirting around the system. Yeah, it’s knocked a tiny number of those out, but-

CORIN Yeah, but that suggests they’re making such a decent profit that they’re quite happy to hand over it.

JONNO Quite happy. Make 100,000, there’s your 50,000, 30,000, whatever it is and keep going.

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