Investment still 'attractive proposition' for landlords despite tax changes - Mike Pero Mortgages CEO

Investment in property is still attractive despite recent changes to tax policy, the boss of a prominent mortgage firm says.

But Mike Pero Mortgages chief executive Mark Collins says some investors are already starting to pull out of the market - that signals good news for first-home buyers, possibly not for renters.

Last week, the Government announced it would phase out the so-called "tax loophole" over four years. Property investors responded by threatening to hike rents and pull out of the market.

Collins said, overall, the changes should bring more stock to the market for first-home buyers.

"There'll be more first-home buyers that can buy," he said. "If you've got fewer people bidding for them [and] if you've got more stock then it's got to have a downward pressure on prices."

Asked by host Duncan Garner if property investors can still make money under the changes, Collins said: "The reality is, yes. It depends on … how much did you pay for it? What yields are you looking for?

"There would be an opportunity for some to put rent prices up which may be the bad side of this.

"Frankly, yes - property investment is still an attractive proposition, it's just probably less attractive than it was before."

Mark Collins.
Mark Collins. Photo credit: The AM Show

What more can the Government do to accommodate renters?

Finance Minister Grant Robertson on Saturday wouldn't rule out introducing rent caps to regulate further increases that may come about as a result of the changes. 

"That's not on our agenda at the moment, but we will keep an eye on what happens," he told Newshub Nation.

"I know actually that a lot of the landlords … they actually don't do big rent increases. They look after the tenants.

"What I would say is that under the Tenancy Tribunal rules, if rent rises are above the market rate, then that can be challenged. And if people do start behaving that way, then that may well be."

While University of Auckland law professor David Grinlinton said the Government could fast track rental hike caps if the situation becomes dire, he's "doubtful" it will happen anytime soon.