Propertyscouts Dunedin

2010 Budget for Property Investors - 28th May 2010

The budget: Well we can’t say we weren’t warned! From the start of the 2011/2012 year depreciation for properties with a predicted lifespan of 50 years or more (that pretty much includes all permanent material
residential properties) will have their depreciation rates set at ‘0’. We think this will see some investors exiting the residential property market. They will be the one who rely on depreciation clawbacks to make
the sums work for there properties. In the short term that could mean an increase in investment type properties going on the market. More properties for sale means more choice for the buyers which equals competition and probably a drop in prices. So what about the up side, if any? If you are like us and keen on
bricks and mortar investments then the next year or two could be a good time to add to your property investment portfolios. We think there will be some well priced properties coming onto the market over the next one to two years. And, with the removal of some investment properties from the rental market (sold to first home buyers etc.) we think there will be increased rental demand resulting in increased rent.

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