Have a look at the things the new Government will put on the table: the removal of the ability to offset losses against other income, changes to the Residential Tenancies Act, extension of the bright line rule to five years, the passage of the Healthy Homes Bill and – in time maybe – a capital gains tax.

These will make property investment more difficult and less profitable – they could all have significant impact on those who own rental properties.

Martin Hawes: ''Rental property ownership is a very uncomfortable position right now."

Martin Hawes: ''Rental property ownership is a very uncomfortable position right now."

But, wait, there's more. Other issues on the Government's agenda may lower house prices: foreign investment will become more difficult, immigration numbers may be reduced, and KiwiBuild aims to add 100,000 to the national housing stock.

Property investors and speculators are facing into a wind that could turn into a perfect storm. These things could all conspire to hit a property market which is already a bit shaky in some parts of the country.

The Government will not want to see a collapse of house prices. We have seen major falls in house prices in Ireland, the US and the UK and it is very bad news both socially and economically. Falling house prices often leave people with more debt than the value of the house and that throws great strain onto families.

Moreover, it puts pressure on the banking system, which can lead through to financial instability.

Although the Government will not want to see significantly reduced house prices, it does not have complete control over house prices – it may be that when the storm hits, prices will fall further than anyone wanted or planned.

In my view, the best outcome would be that house prices are flat for a decade or so. This would increase affordability as wages catch up, making it easier for the next generation to become home owners.

A flat housing market for a decade would be a perfect sweet spot but that will be hard to engineer – a significant fall is possible.

For many property investors, the house market going flat would still be a poor outcome – their returns would be poor. Over the last couple of decades, yields from rents have been very low as prices climbed much higher than rents.

Very low income yields, along with a lack of capital gain (and possible capital loss), make for very poor investment performance.

With all the things the Government has in store, rental property ownership is a very uncomfortable position right now – hopefully there will be no house price collapse, but nevertheless, returns will be low.

As Warren Buffett said, it is when the tide goes out that we find out who has been swimming naked. Property investors with very small incomes may be scrambling for their togs.