Which way will the property market go now?

[Bjauck]

Investing in houses is the best game in town almost anywhere. CGT hasn't changed that in any country. Even with tax free share investments and CGT on property, you'll never beat the property just because the leverage gives you better returns. Also tax free retirement fund gives you money when retired, so government doesn't have to give you back part of what you paid during working decades, but does nothing for your quality of life during your working years.

There's no better way for low to middle class salary earner to get wealthy than property. Not everyone is capable to start business.

I am all for CGT, it will change nothing... well something... share gains will be taxed.

Investing in home ownership and investor Real estate is still one of the best investment avenues in the countries we like to compare NZ with - for example the UK, Australia and Canada. However those countries do try to have a tax system so that investment real estate property gains have a similar tax burden to gains from other investments. This is achieved through CGT, stamp duties and a grossing up of pension plan contributions and with gross income accumulating in pension plans.

I think consequently those countries have a stock market capitalisation at a size more in keeping with the size of their economies - unlike NZ's.