New Zealand passes ban on foreign homebuyers into law

[webfact]

New Zealand passes ban on foreign homebuyers into law

 

Residential houses are seen in Wellington, New Zealand, July 1, 2017. REUTERS/David Gray/Files

 

WELLINGTON (Reuters) - New Zealand's parliament passed a law on Wednesday to ban many non-resident foreigners from buying existing homes, completing the Labour-led government's election campaign pledge.

 

Jacinda Ardern, New Zealand's popular 38-year-old prime minister, campaigned before September's election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.

 

"This is a significant milestone and demonstrates this government’s commitment to making the dream of home ownership a reality for more New Zealanders," Associate Finance Minister David Parker said.

 

Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, almost double in the past decade and rise more than 60 percent nationwide.

 

House price growth has tapered off in the past year in part due to restrictions imposed on lending by the central bank, which was becoming alarmed at the potential financial stability risk of an overheated market.

 

Figures released by the Real Estate Institute of New Zealand on Wednesday showed median house prices had slipped 1.8 percent to NZ$550,000 ($360,140) in July from the previous month, although they were still 6.2 percent higher than the same time the previous year.

 

The government slightly relaxed the proposed ban in June so that non-residents could still own up to 60 percent of units in large, newly built apartment buildings but would no longer be able to buy existing homes.

 

The International Monetary Fund called on the government in July to reconsider the ban, warning the move could discourage foreign direct investment necessary to build new homes.

 

Official figures suggest that the overall level of foreign home buying was relatively low - about 3 percent of property transfers nationwide.

 

However, the data did not capture property bought through trusts and also showed property transfers involving foreigners was highly concentrated in certain areas, such as downtown Auckland and the southern scenic hot spot of Queenstown.

 

The majority of overseas buyers were from China and neighbouring Australia, according to Statistics NewZealand.

 

"Is the ban wise or useful? We think it’s neither," said spokesman Dave Platter of Chinese real estate portal Juwai.com.

 

"Foreign buying ... tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That's vital in a market with a housing shortage, like Auckland," he said. 

 

The government has said the ban would not apply to Australians and has been negotiating with Singapore, whose free trade agreement with New Zealand allows foreign ownership, on whether to grant an exemption.

 

($1 = 1.5272 New Zealand dollars)

 

(Reporting by Charlotte Greenfield; Editing by Paul Tait)

 

-- © Copyright Reuters 2018-08-15

[lovelomsak]

I quess that puts an end to chinese criminals and drug dealers parking their money in real estate in NZ Unless they can get an Aussie sponsor or in the future a Singapore sponsor.

[Esso49]

I wish the UK had done that 50 years ago,  it may still be nice to live there.

[Enoon]

1 hour ago, Esso49 said:

I wish the UK had done that 50 years ago,  it may still be nice to live there.

 

Yes, more countries should shut down, or at least make difficult, foreign ownership of land and property.

 

Good to see Thailand leading in that respect.

 

?

 

 

[tfc]

Australia should have done this a long time ago too but at the very least they should follow the lead of their brother country.

[aussienam]

49 minutes ago, tfc said:

Australia should have done this a long time ago too but at the very least they should follow the lead of their brother country.

They already have clamped down severely on foreign investors.  There are massive Land Taxes charged now in a few States for foreign owners as well as an 'Absentee Surcharge' to penalise you for being absent from Australia for more than 6 months of a year and owning a property (Queensland took it a step further unfortunately and also impose the absentee and corporate rate Land tax to Australian citizens overseas for 6 months - whether that just be a holiday, work or expats).  

There is also a vacancy tax for foreign owners leaving properties without being leased out to tenants.  Plus ownership on pre-existing properties I believe has been stopped meaning only new properties can be bought. 

 

So, although there isn't a ban, there are major disincentives for foreign investors.  I understand doing it to help Aussies but States like QLD hitting their own people as well is screwed up and financially crippling Aussie absentee home owners there.  

[tfc]

23 minutes ago, aussienam said:

I understand doing it to help Aussies but States like QLD hitting their own people as well is screwed up and financially crippling Aussie absentee home owners there.  

 

Agreed.  Just put a ban in like NZ and leave Aussies be.  The beautiful thing is that given the laws of property ownership in the majority of countries these investors come from they can't exactly complain that they aren't being treated fairly.

[Katipo]

"Is the ban wise or useful? We think it’s neither," said spokesman Dave Platter of Chinese real estate portal Juwai.com.

 

"Foreign buying ... tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That's vital in a market with a housing shortage, like Auckland," he said. 

 

 

.....Well, if this is true, and foreign buying is focused on "new development", then the ban on buying existing properties will have little to no effect. So what's the objection?

 

New Zealand, like many nations, is going through a housing crisis. Young people are struggling to save for a deposit large enough to let them enter the property market. This new law will hopefully alleviate this problem. If it doesn't, it can always be changed later. So it's worth a try.

[NickJ]

 Maybe New Zealand should just build a Wall.....

[Jonmarleesco]

21 hours ago, webfact said:

The majority of overseas buyers were from China 

 

"Is the ban wise or useful? We think it’s neither," said spokesman Dave Platter of Chinese real estate portal Juwai.com.

There's a surprise. And it's probably both. 

[Kiwiken]

2 hours ago, NickJ said:

 Maybe New Zealand should just build a Wall.....

We are islands there are no connected Countries

[Kiwiken]

1 hour ago, Jonmarleesco said:

There's a surprise. And it's probably both. 

He represents absentee Chinese Investors of course he opposes the ban,

The ban is only the start

[whiteman]

I am not sure but do not the overseas buyers have to build  a new HOME AND THEN have to sell it after one year???? Can not keep it?

[brewsterbudgen]

One thing that Thailand has right!

Sent from my SM-G930F using Thailand Forum - Thaivisa mobile app

[samran]

18 hours ago, tfc said:

Australia should have done this a long time ago too but at the very least they should follow the lead of their brother country.

All that NZ has done is adopt the Australian system of having establishing a foreign investment review board, which Australia has had for 30 plus years at least.

 

As in OZ, foreigners will still be allowed to purchase land, so long as it is a new build or some sort of value add.

 

Australian's will be exempt from NZ's version of the FIRB, as Australia also exempts Kiwi's from going through the process.

 

Still, i guess the article has got the chest thumpers and the associated xenophobes all riled up. I mean, easy to have a go at the buyers, forgetting that it is a native person actually selling them the land. 

[tropo]

1 hour ago, samran said:

All that NZ has done is adopt the Australian system of having establishing a foreign investment review board, which Australia has had for 30 plus years at least.

1

That's about right. It started in the late 80's as a result of the huge amount of property the Japanese were buying at that time, and the massive property inflation it caused. In the 80's they could just come in and buy anything they wanted.

[timendres]

On 8/15/2018 at 6:38 PM, Enoon said:

Good to see Thailand leading in that respect.

 

2 hours ago, brewsterbudgen said:

One thing that Thailand has right!

Doesn't Thailand only restrict ownership of the land beneath the house?

And it makes sense, since at the time that law was passed, foreigners could have easily bought and owned every inch of Thailand.

 

However, I do think they could make a compromise. For example, allowing anyone who is married to a Thai national and living permanently here, or anyone working here for more than 2 or 3 years, would be allowed to own property, but only for the purpose of home ownership. And if they leave, they must sell.

[Redline]

I believe this will be a trend sooner than later

[BEVUP]

Well it was NZ no Stamp duty that attracted a lot of people, even including Auss politicians 

[The manic]

On 8/15/2018 at 10:36 AM, lovelomsak said:

I quess that puts an end to chinese criminals and drug dealers parking their money in real estate in NZ Unless they can get an Aussie sponsor or in the future a Singapore sponsor.

Rich criminals always find a way

[theguyfromanotherforum]

What a bunch of crap replies from sore losers who probably sold everything in their home country and bought in Thailand.

 

New Zealand economy just like Canada to a lesser extent now solely relies on immigrants and foreign money (Canada at least still has natural resources). Name me one thing your loser, lazy western economies are actually producing.

 

Now elect a social government that supports lazy bums who would rather spend money on Starbucks latte and avocado sandwich instead of saving for a down payment and this is what you get.

 

Btw, since when was buying a house affordable. People in the past would pay the bank all their life until  they were mortgage free. These days people act like it's their birth right to have a house by the time they reach 30. Very strange that Thai Visa posters support this while all the time they whine and whine about social services in their respective countries.

 

The only reason why Westerners are poorer is because they are lazier. I am looking forward to NZ dollar hitting 10 baht because Chinese money will stop pouring in, so next time you do your retirement extension it will cost ya $80,000. If anything, you should be rolling a red carpet for every Chinese investor. You have no economy left.

 

 

 

 

Edited August 16, 2018 by theguyfromanotherforum

[lovelomsak]

2 hours ago, theguyfromanotherforum said:

New Zealand economy just like Canada to a lesser extent now solely relies on immigrants and foreign money (Canada at least still has natural resources). Name me one thing your loser, lazy western economies are actually producing.

Then why did you immigrate to Canada ? You brag about immigrating and all the positives well you contribute nothing to Canada. you immigrate and as soon as citizen use the system to go live in Thailand. 

 You should stay quiet you are a good example of what makes the problems in Canada.

[theguyfromanotherforum]

20 minutes ago, lovelomsak said:

Then why did you immigrate to Canada ? You brag about immigrating and all the positives well you contribute nothing to Canada. you immigrate and as soon as citizen use the system to go live in Thailand. 

 You should stay quiet you are a good example of what makes the problems in Canada.

 

Every month I pay a 25% non resident tax to the government without having any rights (like seeing a doctor) until I re establish the residency.

 

You really shouldn't speak about things you know nothing about.

 

[pattayadgw]

Good on you NZ.... OZ take note and do the same!!

[lanista]

Good luck to NZ but basically NZ is too isolated and small to remain a sovereign country well  into the 21 century.

It will eventually join the Australian Federation  or be gobbled up by the Chinese.

The kiwi dollar is rubbish. Only jingoism gets in the way of adopting the AUD.

Strength in numbers.. 25 m + 4 m =29m.

[samran]

1 hour ago, pattayadgw said:

Good on you NZ.... OZ take note and do the same!!

Gawd, you don’t really read do you? 

 

All NZ have done is adopt the Australian model. 

[canthai55]

360K average to buy a house. Like in Canada - Madness

Spend your whole working life - and your wifes - to pay the debt for the dubious pleasure of owning a collection of lumber and concrete.

That the attached song - substitute bank for Company Store - and see yourself being held in Slavery by the Elite

 

 

[TPI]

19 hours ago, Kiwiken said:

We are islands there are no connected Countries

Joke...you know?

[shy coconut]

4 hours ago, theguyfromanotherforum said:

 

Every month I pay a 25% non resident tax to the government without having any rights (like seeing a doctor) until I re establish the residency.

 

You really shouldn't speak about things you know nothing about.

 

25% of what?

[Mac98]

On 8/16/2018 at 2:53 PM, Kiwiken said:

We are islands there are no connected Countries

I think that was a dig at Trump and he knows how useless a wall would be on your.island.

Edited August 18, 2018 by Mac98
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