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A newly built housing estate can be seen next to another that is under construction in a suburb of Auckland, New Zealand. PHOTO: REUTERS
Foreigner intending to speculate on properties in New Zealand will no longer be able to buy existing houses in New Zealand from early 2018. This was announced by the new Prime Minister of New Zealand's new government, Jacinda Ardern at press conference on Tuesday, 31 Oct 2017). This is a big effort to prevent a bubble from forming in the New Zealand property market and most importantly to make it easier for Kiwis to buy their first home.
Recent years have seen tens of thousands of foreign speculators buying houses and driving up prices in various cities of New Zealand causing prices of properties to increase much higher that the salaries of New Zealanders, making the possibility of owning their first home out of reach for more and more New Zealanders.
New Zealand house prices have surged in recent years, driving the average value in biggest city Auckland to more than NZ$1 million (S$932,000) and putting property out of reach for many younger Kiwis. The law change will bring New Zealand into line with other countries including neighbour Australia, where non-residents are also restricted from buying homes unless they are newly built.
Current investors who owns existing properties in New Zealand may receive a lower valuation in their properties as cash rich foreigners will no longer be able to buy these existing properties from early next year and these investor sellers can only sell to the locals in New Zealand.
Recent years have seen tens of thousands of foreign speculators buying houses and driving up prices in various cities of New Zealand causing prices of properties to increase much higher that the salaries of New Zealanders, making the possibility of owning their first home out of reach for more and more New Zealanders.
New Zealand house prices have surged in recent years, driving the average value in biggest city Auckland to more than NZ$1 million (S$932,000) and putting property out of reach for many younger Kiwis. The law change will bring New Zealand into line with other countries including neighbour Australia, where non-residents are also restricted from buying homes unless they are newly built.
Current investors who owns existing properties in New Zealand may receive a lower valuation in their properties as cash rich foreigners will no longer be able to buy these existing properties from early next year and these investor sellers can only sell to the locals in New Zealand.
Wellington has seen property prices increasing over the years to high levels beyond the reach of many young Kiwis
Therefore, the New Zealand's new government said it will change the law to prevent foreigners from buying existing homes in the South Pacific nation to reduce speculation and make it easier for first-time buyers to enter the market.
In particular are speculators and property buyers from mainland China who poured in more than NZ$10 billion over the last few years to snap up vast plots of land, houses and buildings. In fact, other than New Zealand, Chinese money has pushed up home prices around the world, stoking concern among locals in cities from Vancouver to Sydney.
New Zealand is considered as one of the favoured country for the rich to buy an oasis to retreat to annually. The New Zealand government believes this policy will solve a political problem and put a cap on rising home prices in New Zealand.
In particular are speculators and property buyers from mainland China who poured in more than NZ$10 billion over the last few years to snap up vast plots of land, houses and buildings. In fact, other than New Zealand, Chinese money has pushed up home prices around the world, stoking concern among locals in cities from Vancouver to Sydney.
New Zealand is considered as one of the favoured country for the rich to buy an oasis to retreat to annually. The New Zealand government believes this policy will solve a political problem and put a cap on rising home prices in New Zealand.
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New Zealand's labour-led government will move forward to introduce amendments to the Overseas Investment Act to classify residential housing as "sensitive," meaning non-residents or non-citizens cannot purchase existing residential dwellings. Australians will not be affected because New Zealanders are exempt in Australia.
The new government, being less than a month old plans to introduce the foreigner property legislation before Christmas and pass the law early next year, before the Trans Pacific Partnership (TPP) is ratified. She said it then won't breach any trade agreements expect the Singapore Closer Economic Partnership, which would be worked through with Singapore as the proposed change means New Zealand can move its focus away from land issues at the negotiating table at Apec.
New Zealand still has concerns about Investor State Dispute Settlement clauses in the TPP, as these confer "greater rights on multi-national companies investing in New Zealand than a New Zealand company has" and the government plans to amend the ISDS provisions of TPP and oppose ISDS in any future free trade agreements.
The new government, being less than a month old plans to introduce the foreigner property legislation before Christmas and pass the law early next year, before the Trans Pacific Partnership (TPP) is ratified. She said it then won't breach any trade agreements expect the Singapore Closer Economic Partnership, which would be worked through with Singapore as the proposed change means New Zealand can move its focus away from land issues at the negotiating table at Apec.
New Zealand still has concerns about Investor State Dispute Settlement clauses in the TPP, as these confer "greater rights on multi-national companies investing in New Zealand than a New Zealand company has" and the government plans to amend the ISDS provisions of TPP and oppose ISDS in any future free trade agreements.
http://www.straitstimes.com/business/property/new-zealand-to-slap-home-buying-ban-on-foreigners-to-cool-market
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