In its latest Economic Overview, Westpac forecasts that annual house price growth will rise from the current 1.3% to 7% over the next year or so, helped by sharply lower mortgage rates and the scrapping of capital gains tax.
Westpac said the sharp fall in interest rates over recent months would reshape New Zealand’s economy.
The bank’s chief economist, Dominick Stephens, said the substantial drop in fixed mortgage rates, coupled with the scrapping of capital gains tax, would be the main drivers of house price growth.
“We expect annual house price growth to rise from the current 1.3% to 7% over the next year or so. This should stimulate consumer spending and remove the need for the Reserve Bank to cut the Official Cash Rate (OCR) further.”
Earlier this month, the Reserve Bank of New Zealand became the first central bank in the Western world to cut interest rates, lowering the OCR to a record low of 1.5% and signalling further cuts.
Stephens noted that New Zealand’s recent economic performance had been disappointing: GDP growth averaged about 0.4% in the final two quarters of 2018, keeping pace with population growth. “We expect growth in the third quarter of this year to be only around 0.5%. However, we expect momentum to recover gradually over the remainder of the year.”
Westpac expects New Zealand’s annual GDP growth to fall to 2.3% this year, before recovering to 3.1% in 2020.
Westpac remains optimistic about New Zealand’s economic outlook. First, population growth driven mainly by migration has been stronger than expected, and forecasts of rising net migration also provide greater support for housing construction.
Export earnings are also expected to increase this year.
Landlords cannot ask tenants about their gender, ethnicity, age and so on. In New Zealand, many matters are private and cannot simply be asked about. Landlords can also land themselves in trouble when turning down prospective tenants. If you say, “My English is poor, so I don’t want to rent my house to British people,” you can expect to face legal action.
Asking whether someone is “Indian” also crosses the line: questions about ethnicity are strictly off limits.
New Zealand’s Office of the Privacy Commissioner (OPC) has released guidance on the personal information landlords may ask people viewing a property to provide. Questions about nationality, age, bank statements, employment status or driver licence numbers are considered “unreasonable”.
Privacy Commissioner John Edwards said: “Landlords may lawfully collect information about prospective tenants to assess their ability to pay rent, but collecting their bank statements and examining how they spend their money is an unfair and unreasonable intrusion.” “Landlords should collect only the minimum personal information needed to make a decision.”
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So what limits apply to the personal information landlords and property managers may collect? The Office of the Privacy Commissioner says it depends on whether it is “always justified”.
Questions that are “always justified”:
- Name and proof of identity
- Contact details
- Previous landlords’ names and contact details
- References from one or two previous landlords
- How long the applicant intends to rent the property
- Whether the applicant has ever been deported
- Whether the applicant has pets
- Whether the applicant needs to give notice and end an existing tenancy
- Whether the applicant consents to a criminal record check
- How many people will live at the property
Questions that are “justified to some extent”:
- References from other people, if landlord references are unavailable
- Proof of current income, including payslips and bank statements
- Whether the tenant smokes, if the property is smoke-free
- Reasons for ending an existing tenancy
Questions that are “never justified”:
- Requests to collect extensive personal information from various sources
- Asking for a driver licence number
- Asking for credit card details
- Asking about nationality, ethnicity, birthplace and citizenship
- Asking about age, marital status, family circumstances, personal beliefs, opinions, gender and sexual orientation
- Asking about sporting pursuits, interests and foreign languages spoken
- Asking about previous rent payments, current expenses or proof of insurance
- Asking whether the applicant has had disputes with previous neighbours or property management
- Asking for banking history
- Asking for details of current living arrangements
- Asking about employment history and employment status
The Office of the Privacy Commissioner said landlords and property managers “need only the minimum possible personal information” when deciding whether to enter into a tenancy agreement with a prospective tenant. “For example, if a credit report shows that an applicant has a good credit history, there is no need to collect their bank statements.”
Only once landlords and property managers have selected their tenant may they request additional information, such as how rent will be paid and the name and address of an emergency contact.