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New Zealand to slap home-buying ban on foreigners to cool market

New Zealand's new administration said it'll change regulations to prevent burglars from purchasing existing homes from the South Pacific state to decrease speculation and make it easier for firsttime buyers to enter industry. Australian speculators will no longer have the ability to purchase houses in New Zealand from early next season," Prime Minister Jacinda Ardern said at press conference on Tuesday (Oct 31). "We are determined to make it a lot easier for Kiwis to get their original home so we're quitting foreign speculators buying houses and forcing prices up. Kiwis should perhaps not be out bid such as this.

New Zealand house prices have soared in the last few decades, driving the normal value in largest city Auckland to over NZ$1 million (S$932,000) and setting property outside of reach for several younger Kiwis. The law change will bring New Zealand into line with other nations including neighbour Australia, where non-residents are also restricted from buying houses unless they are newly constructed.

Chinese cash has pushed up home prices across the world, stoking concern among sailors in cities from Vancouver to Sydney. New Zealand has also come to be a favoured location for the wealthy to buy boltholes to escape to. But there is limited data on the number of non-resident foreigners actually purchase residential houses in New Zealand, with the prior government asserting they accounted for as little as 2 percent of overall purchases.

That is a policy that is intended to solve a political problem, opposition finance spokesman Steven Joyce explained. Evidence in the Australia and here in New Zealand is that foreign buyers don't have a significant impact on the housing marketplace. Ardern said she nonetheless hopes that the ban will "take a number of their heat" out of the market.

Her Labour-led authorities will introduce a change to the Overseas Investment Act to classify residential housing too sensitive, meaning non-residents or non-citizens cannot buy existing residential dwellings. Australians won't be affected because New Zealanders are cheated in Australia. The legislation change also removes a hurdle to New Zealand signing up to the revised Trans Pacific Partnership, a transaction arrangement between 11 nations that may reduce tariffs and raise the country's exports. Member states will seek agreement on the TPP at an Apec meeting in Vietnam next week.

In its present shape, the TPP would assert burglars' access to New Zealand property. The new administration, guaranteed in just last week, faced having to re-open negotiations, which lacked scuppering the offer at this late stage. The domestic law change provides Ardern using a work-around. She wants to present the law before Christmas and pass regulations early next year, even until the TPP is ratified. She said it afterward won't breach any trade agreements expect the Singapore Closer Economic Partnership, which will be worked through with Singapore.