At the beginning of every year we get out the crystal ball and ask our property experts what they foresee in the year ahead. Although we don’t think anyone could have predicted the vertiginous rise in property prices that 2020-2021 brought, it’s always interesting to get people’s informed opinions on the forces that are likely to shape the market in the next 12 months.

The general consensus is that 2022 is going to be challenging. With interest rates rising, the possible introduction of debt-to-income ratios, more stringent criteria for loans from banks, and the removal of interest rate deductibility, investors may start to feel the screws tighten.

Our experts are predicting everything from a credit crunch (which is already being witnessed firsthand by investors as banks tighten lending criteria), and property sell-offs at tax time, to increasing lending restrictions as the Reserve Bank attempts to tighten the reins on a housing market that’s bolted.

Elsewhere in the magazine, we revisit some of the people we profiled in 2021, and find that many of them are already employing new strategies. They are reporting that it’s now more beneficial to add value to existing properties or undertake larger developments than to buy-and-renovate or buy-reno-flick.

With bargains being harder and harder to come by, and yields not adding up, the rules around intensification are set to provide new opportunities for savvy investors committed to staying in the game.

Talking about new opportunities, our second lead focuses on the pros and cons of new builds versus buying existing property. They are exempt from the Government’s new tax wiping out mortgage interest as an expense against rental income, and the bright-line test stays at five years instead of 10 for existing homes.

Recent data reveals the average price of building a house has only increased 4.4% in the past year, but this doesn’t factor in land costs and the other raft of expenses involved. But building new is an option that the Government is promoting, and there are some compelling arguments in favour of this strategy.

We hope that this issue gives you food for thought and inspiration for your own property journey. Property investing is a long game – we may not be headed for another record-breaking year, but 2022 will offer savvy investors opportunities they may have never explored before.

Happy summer and all the best. From the team at New Zealand Property Investor.