News from New Zealand that the government will implement new measures to curb rising house prices, has plunged kiwi dollar trading to a 3-month low against the US dollar.
Home prices have soared 23% in 12 months, far higher than the rate of wage growth and pushing most unaffordable buyers out of the market.
Following that, in a speech on Tuesday in Wellington, Prime Minister Jacinda Ardern announced an aid package aimed at tackling housing supply and demand problems, as well as helping balance in the market.
Ardern said a NZ $ 3.8 billion fund would be formed to open up more land for housing development and the government would provide first home grants for more people.
Apart from that, he also announced that he will double the ‘bright-line test’, which is the period of time that should be given to investors to hold the property to avoid paying tax when selling, to 10 years from 5 years.
This has indirectly caused the New Zealand dollar to fall 1.2% and trade around 0.70700 against the greenback dollar.
