Labour's housing policy announced this week will have little impact on Rotorua's real estate market but it could save an unwanted property boom down the track.
While there's no denying a steady and healthy housing market is great for the economy, we wouldn't want to see our prices inflate somuch it puts homes out of reach for local first-home buyers.
The Reserve Bank could soon require first-home buyers to have a 20 per cent deposit - a move aimed at cooling the soaring Auckland market. While this could still be within reach in Rotorua, with our median property prices last month at $277,500, such a large deposit kills the dream for many people in bigger cities.
New Zealanders are said to have an obsession with owning their own home and I can see why. There's nothing more satisfying than pottering around on your very own piece of dirt.
In my view Rotorua's property prices are still a bargain. The secret clearly isn't out among foreign investors and quite frankly, I'm glad about that.
Some of those against the policy say Labour is being racist, an absurd accusation. The issue is foreigners should not be allowed to buy up our properties at the expense of locals or other New Zealanders.
But given only about 5 per cent of property sales are currently going to foreign buyers (and barely at all in Rotorua), it's amazing Labour's policy has attracted such media attention this week. Is it just an excuse to pull out the race card in politicking?
Labour's capital gains tax policy will affect more people.
