NZ Labour to ban foreign home buyers

By Leith van Onselen

Later this week, New Zealand’s Labour-led coalition Government will introduce legislation to implement the first tranche of its demand-side housing reforms, amending the Overseas Investment Act to preclude foreign buyers from purchasing residential property. From The Canberra Times:

Ms Ardern’s Labour Party is adamant that a law change banning foreigners from buying most types of homes in the country… will help damp down property prices.

The bill will still allow foreigners to buy new apartments in large developments and multi-storey blocks. Existing homes remain off limits to non-residents, but people from Australia and Singapore will be exempt from the ban, due to free-trade rules.

David Parker, the minister for trade and economic development who is responsible for the bill, said it wasn’t just about house prices.

“In this world of concentrating wealth, we don’t want this coterie of ultra-wealthy people overseas being able to outbid successful New Zealanders for what is our birthright, not theirs,” he said.

Great to see. Although I would have gone further and banned temporary residents from purchasing established dwellings as well. As is the case in Australia, there is also the issue of how the new regime will be enforced. After all, there’s little point in having the rules in place if they are policed lackadaisically, and those found breaking the rules are not punished adequately.

According to Statistics New Zealand, foreign buyers gobble 7.3% of Auckland homes in the March quarter:

This is material given the acute housing pressures in Auckland, where average dwelling values are above $1 million and there is a chronic shortage of housing:

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Comments

    • We already have these types of laws. We just don’t enforce them. Given NZ’s track record on housing reform so far I expect they won’t enforce them either.

  1. We need more then that, zero foreigners buying Any property and an audit going back 15 years of foreigners that have bought. Jail and seized property for any wrong doing by all involved. ✊

    • What, only 15 years?
      Why mot go all tha way back?

      All this gets ti be fixed with appropriate land tax and NG removal.
      Nothing wrong with foreigners bying any property as long as they do not remove it from the rental market and cannot claim benefits for doing so whilst paying 0 ongoing taxes.

      A few suburbs i follow have nearly tripled in number of rental offerings. Not all that was built in the last 6 months, there is a suddent motivation to rent out.

      • Australia for Australians, not foreigners. End of story. We would be in Norways shoes if we didn’t sell out for pennies. ✊

      • Ok… all the recent immigrants should be expelled, you say.
        So only those that immigrated 1000’s years ago can stay, right?

        But then again foreigners buying local property has nothing to do with xenophobia of a “X-country to X-men”. You can still sell them property and reap benefits from it (or rip only problems, as per current setup). If my xeno-landlord purchases local RE with finance from abroad and does not get local tax benefits that skew the market and benefit few… and keeps the property for rent whilst paying land taxes, etc…

  2. 3% is didley, was a nothing, still is a nothing and will do nothing to lessen demand!

    BTW – its a statistical error anyway, because most foreign buyers become NZ citizens anyways. Is just they buy before officially stamped.

    • Yeah, but at least it LOOKS like the Govt are doing something pro-active.

      It’s the ‘optics’ that matter, not the substance

  3. I’d like to see a bit more walk back on the Ardern bashing over the last couple of months from mb. (Teasing, sort of 🙂)

  4. Foreigners face ban on buying homes in New Zealand … UK Telegraph

    https://www.telegraph.co.uk/news/2018/08/10/foreigners-face-ban-buying-homes-new-zealand-apocalypse-bolthole/

    … extract …

    … But the country’s centre-left government, led by Prime Minister Jacinda Ardern, is blaming the apocalypse preppers for a major housing crisis in the country, with rates of homelessness among the highest in the developed world.

    Ms. Ardern’s Labour party is adamant that a law change banning foreigners from buying most types of homes in the country – due to pass in parliament next week – will help damp down property prices, along with their plans to build 100,000 affordable housing units in a decade, resolve New Zealand’s zoning and infrastructure woes, and bolster its ailing construction industry.

    The bill banning foreign buyers has been reeled in from an earlier, stricter, version, and will now allow foreigners to buy new apartments in large developments and multi-storey blocks. Existing homes remain off limits to non-residents, but people from Australia and Singapore will be exempt from the ban, due to free trade rules. … read more via hyperlink above …
    .
    .
    The Overseas Investment Amendment Bill was one of the first bills the Government said it would implement and this week it will likely become law | interest.co.nz

    https://www.interest.co.nz/property/95294/overseas-investment-amendment-bill-was-one-first-bills-government-said-it-would
    .
    .
    Reality check for Ministers (really some … just some … asleep enviros) at environment conference | Politik

    http://politik.co.nz/en/content/Environment/1400/Reality-check-for-Ministers-at-environment-conference-Environmental-Defence-Society-Gary-Taylor-Phil-Twyford-David-Parker-RMA.htm

    … extract …

    … Attendees probably left last night with more questions than when they arrived as Ministers, who in Opposition had seemed sympathetic to environmental issues were left qualifying and modifying their stance on major issues.

    This was starkly evident in an exchange between Urban Development Minister, Phil Twyford, and the EDS CEO, Gary Taylor over urban sprawl.

    Twyford had set out an impassioned description of the impact of high house prices in Auckland and advocated the linking together of transport and other infrastructure and new housing developments.

    But he also advocated the scrapping or urban-rural limits.

    “We believe that we have to manage growth on the fringes of the city,” he said.

    “If we do not allow new land to come into the supply we will never ever fix the problem of absurdly expensive urban land.

    “With good investment in infrastructure and transport, with more planning, not less to create the future urban environment that we want, setting aside areas of special value and open spaces, acquiring land for transport and other infrastructure, if we then allow the city to grow we will bring down urban land prices and it is absolutely critical that we do,” he said.

    Twyford had proposed this when he was in Opposition but, even so, any suggestion that more rural land was going to be absorbed for housing was going to be controversial at an environmental conference.

    And Taylor was quick to respond.

    “Everything makes sense except I worry about why you need to do away with rural-urban boundaries altogether,” said Taylor.

    He said that giving free reign to developers seemed inconsistent with Twyford’s overall objective of having a compact city.

    Twyford replied that it was a question of values.

    “This is for us, for Labour, for our coalition government, this is fundamentally a social justice issue.

    “Our objective is not to build a Copenhagen of the South Pacific.

    “We could build a beautiful city with a whole lot of the policies we have talked about.

    “We could build a Vancouver of the South Pacific; beautiful but utterly unaffordable.

    “I’m interested in us fixing this totally dysfunctional urban land economy.

    “If we don’t deal with affordability we will have completely wasted the opportunity that has been given to our generation.”

    Twyford said the only way to deal with the affordability issue was to deal with the land price issue and that meant dealing with the artificial scarcity of land caused by the planning system and the availability of finance for infrastructure.

    However he didn’t dispute that the Auckland region was going to become more heavily built up.

    “You know what,” he said. “In two or three generations this is going to become a tri-city conurbation between Hamilton, Tauranga and Auckland whether we like it or not.” … read more via hyperlink above …

    • … New Zealand’s politically induced low productivity ‘costs out of control’ economy …

      Confidence in the economy is wavering, and there are at least five key reasons, most related to some big public policy changes, and how households have reacted to the consequences | interest.co.nz

      https://www.interest.co.nz/personal-finance/95278/confidence-economy-wavering-and-there-are-least-five-key-reasons-most-related

      Business confidence is falling fast.

      But Government ministers say that is an over-reaction. They point to the growing economy. They point to rising wage settlements, both for minimum wage workers and Government health and education workers. Economic growth and higher payrolls are not being properly accounted for, they say. They are about to start a charm offensive, trying to head off another ‘winter of discontent’ in the business and investment community. … read more via hyperlink above …

  5. SchillersMEMBER

    The other factor affecting the cost of land and house prices in NZ is the number of IPs that are left vacant. Without a serious vacant property tax and well funded data capture to identify, report and police it, there will continue to be housing shortages in NZ, especially in Auckland. Too may homes with potential to rent and/or owner occupy are left empty or turned into short stay airbnbs.

    https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11654495
    https://www.stuff.co.nz/life-style/homed/latest/103024164/is-it-time-to-address-the-question-of-empty-ghost-houses

  6. There was a guardian article on the ‘prepper’ angle on all this. Its very different from what Canada and Australia has to deal with, so they might actually follow through. I don’t think they mind the foreign buyers, but they do mind the foreign buyers who intend to run a world government from NZ and have the money to try and make it happen.

  7. Re the ‘NZ housing changes.’
    The Chinese and other foreign criminal syndicates will just continue to purchase what is mostly old modest established residential housing – via proxies.

    Sure, the billionaires splashy multimillion trophy houses make the headlines – but that is not the ‘core structural or social impact’ to the average New Zealander in affordable housing in their migrant induced housing crisis.

    And their issue is not going to be fixed by imposing easily avoided (via proxies) foreign ownership controls.
    Or wasting tens of billions in building ‘affordable NZ housing’ and tax concessions etc.
    These will just be massively exploited by the foreign syndicates using foreign born or onshore proxies to use this taxpayer subsidy to acquire even more NZ housing also (aka the NRAS scheme in Australia, First Home Buyer Grants and Negative Gearing – tens of billions of Australian tax payer money exploited by foreign money & onshore proxies avoiding FIRB etc that absolutely wiped out Australian owned or occupied modest established residential housing).

    New Zealand has to stop the core nutrient of underlying demand. The real underlying driver.
    This foreign acquisition, including via proxy of low level & very modest ‘average’ or bottom of the market eatables dwellings (units or small old suburban affordable housing) is all driven by…
    ➡️the big money in cram housing & illegal cash in hand subletting in housing the NZ intake of third world unskilled on pretext visas & fake documents.
    And almost all this intake has the goal of using NZ as a transit stop to then enter Australia.
    So it is our Australian problem also.

    Migrants primarily enter NZ on temporary visas as entry is easy with work rights or easily obtained illegal work (as per Australia) to then gain the NZ residency or citizenship, to then enter Australia on a Special Category Visa (SCV) with full work rights & residency in Australia. The SCV rules only require one family member to be a NZ citizen, the rest can just be NZ resident and also enter Australia on the extended family & other widespread visa fraud & racketeering.
    After a while they can become both foreign passport holders, NZ residents and Australian PR or Citizens.

    There are over 650,000 of NZ SCV in Australia.
    One third or 230,000 are now non NZ born unskilled third world origin who got into Australia via the NZ back door.

    It’s a 95% one way flow from the third world (China, ethnic Chinese from north & South Asia, Indians & others).
    The general profile is third world, unskilled (NZ for a long time had virtually no controls) so migrants who could not get in the front door of Australia, or migrants who did years in Australia on TR, got kicked out or would never get in.

    So they go via NZ as the back door.
    On pretext student, spousal or partner or other visas – work, work illegally there, get the easy NZ residency stamp – then enter or in many cases ‘re-enter’ Australia but now with a life time access to live work & stay in Australia.

    Winston Peters: prior to the NZ election where he was elected with the mandate to fix NZ immigration & the balance of power in actually choosing the government.

    “NZ only sells two things, milk powder to the Chinese & NZ residency stamps to get into Australia”.

    “We should apologise to Australia for the damage we have done’

    NZ Housing.
    In NZ the foreign criminal syndicates bought up old modest established NZ housing – to house the hundreds of thousands of fake of pretext visa third world migrants in massive migrant only cash in hand sublet bunk & mattress share / often 3 families or 8 to 10 ‘students’ living illegally and the cash flow never declared. Billions in cash return.

    A white hot issue in NZ (some 60,000 plus modest established ex NZ dwellings being acquired by foreign buyers or onshore proxies in reality).

    ➡️Ask yourself – who now lives in this housing after the NZ born occupants have left or are evicted ?
    The 380,000 Chinese, Indian, North & South East Asian, Nepalese, Arab, Africa & other Temporary Visa ‘students’ or ‘sponsored’ illegally working migrants, all with the goal of gaining NZ residency.
    To then get the SCV to enter Australia.

    Auckland became a ‘mini me’ transit stop of their ultimate destination, Sydney & Melbourne.

    Once in Australia, they then joined the flood of what is now 2.7 million third world unskilled migrants on pretext TR (2.2 million) or illegally working Tourist visas (440,000) now in Australia.

    It’s called the NZ backdoor.

    In Australian we now have at least 450,000 modest established dwellings that have been acquired & converted by foreign owners or proxies to house them.
    2.2 million Temporary Visa holders & 440,000 illegally working foreign ‘tourists’ at an average occupancy of 6 per dwelling, twice the national average.
    (Where do people think they all live ?)

    The migrant pathway and flow has recreated exactly the same ‘housing price bubble’ in NZ in migrant only enclaves, cash in hand subletting, contention, rental shortage & homelessness we see in their ultimate destination Sydney & Melbourne.

    NZ Migrant Backlog.
    There are over 250,000 unskilled, fake doc, pretext third world foreign temporary migrant students, ‘sponsored’ and other visa groups in NZ – still waiting for the NZ Residency stamp.

    Once they get it, the vast bulk will also enter Australia / swelling the NZ SCV numbers – offset by the genuine NZ sold of who are actually going back.

    SCV Statistics.
    The overall 650,000 NZ SCV in Australia has been flat but look more closely within that and the trend is alarming.

    From only 8% to now 30% or 210,000 non NZ born in NZ SCV in Australia in 8 years.
    The trend is the NZ born increasingly are going back or take up Australian citizenship- but the non NZ born SCV intake given backlog will increase by 250,000 or to 460,000 – 70% of SCV being non NZ born, mostly third world & mostly unskilled – in the next 8 years.

    That’s nearly half a million non NZ born third world unskilled who will sneak in via the NZ back door.

    ➡️The answer for both NZ and Australia is to immediately shut down the Trans Tasman third world unskilled migrant trafficking trade.

    🔹NZ & Australian SCV to be only for Australian or NZ Citizen born.

    That is a simple, clean, effective and ethical change. To the original intent of the NZ / Australia partnership.

    The third world unskilled migrant intake backdoor trade into NZ will stop overnight. They will not go to NZ if they can’t get into Australia.

    And the foreign criminal syndicates and proxies will stop acquiring NZ Modest affordable established housing – as they won’t have a transient migrant renter base to exploit in cram cash in hand subletting.

    The 230,000 Third World unskilled on NZ SCV already in Australia should have their Australian work rights & all benefits removed and sent back to NZ.

    Many such as the Chinese or Indians remained on their country of origin passports, with no intention of ever being a long term or a citizen in NZ.
    They should not be eligible for preferential treatment in an Australian PR or Citizenship either. They can back to China or India or anywhere else they can sneak into.

    It’s a joint issue to resolve.
    The simple fact is they should never have been allowed into NZ to then flow unchecked into Australia in the first place.

    Winston Peters.
    Peters has offered to formally apologise to Australia for the economic & social damage NZ has done to Australia in allowing this trafficking to occur.

    He was elected on this being a core election issue & and held the balance of power in choosing NZ government.

    He should lead the initiative to fix the SCV so it’s only for NZ or Australian born citizens.

    Both countries would immediately benefit.

    It removes the underlying nutrient driving the foreign criminal syndicates / onshore proxies & dirty money in buying up modest established housing in NZ and Australia. And that nutrient is the vast numbers of migrant guestworkers who occupy & ‘rent’ what used to be modest affordable NZ or Australian housing.

    That low level modest housing once de-occupied by the exit of the migrant transient renters will go back on the market.

    No huge investment is then needed in futile NZ gesture of tens of billions wasted in providing ‘more affordable housing’ or taxpayer funded concessions that will be just gobbled up by the foreign syndicates & their onshore proxies anyway.

    (Same applies in Australia, remove the nutrient which is the 2.7 million long stay illegally working migrant guestworkers)

    An immediate SCV Change to only NZ or Australian born citizens also means Australia is protected from the quarter of a million third world unskilled migrants now queued up in NZ from coming in on a SCV and further adding to our own larger housing & migrant intake/visa crisis.