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New Zealand ban foreigners buying property

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in Not Sports Related
New Zealand has banned foreigners for buying property there in response to skyrocketing house prices across the nation.

Parliament passed the law (the text of which is here) on Wednesday, barring most overseas visitors from purchasing homes or land.

"If you've got the right to live in New Zealand permanently, you've got the right to buy here. But otherwise it's not a right, it's a privilege," New Zealand's minister for economic development and trade David Parker said in a speechon Wednesday.

"We believe it's the birthright of New Zealanders to buy homes in New Zealand in a market that is shaped by New Zealand buyers, not by international price pressures."

People from Australia and Singapore will be exempt from the ban, as will foreigners with New Zealand residency.

The move aims to ease housing prices that have seen a sharp rise in recent years.

According to a 2017 report by the Real Estate Institute of New Zealand, property prices in Auckland had risen by $230,000 in just five years time.

And home ownership has decreased significantly among the population. Data from from the Statistics New Zealand Dwelling and Household Estimates showed that only 63.2 percent of people nationwide owned their own home in 2017 - the lowest proportion for decades.The housing crisis has largely been pinned on wealthy overseas investors, mainly from China and Australia, swooping in on properties that would serve as hideaways far away from conflict sweeping over the rest of the world.

"It's in the back of everybody's mind at the moment. If there are, shall we say, changes, where can we go?," Michael Nock, a Hong Kong-based hedge-fund manager who owns a multimillion-dollar property in Queenstown, told the Guardian last year.

"I researched this problem dispassionately and settled on New Zealand … it is a small community that has the ability to be self-reliant, with a rule of law based on the English system. And it is stunningly beautiful - it ticked all the boxes."

Nock is not alone in his concerns. A recent New Yorker report suggested that hundreds, if not thousands, of super-wealthy silicon valley executives are secretly preparing for the apocalypse, and many think of New Zealand as the perfect location to ride out a doomsday scenario.

"Saying you're 'buying a house in New Zealand' is kind of a wink, wink, say no more," Reid Hoffman, the co-founder of LinkedIn told the New Yorker. Hoffman estimated that at least fifty percent of Silicon Valley billionaires have acquired some type of "apocalypse insurance" in the form of a hideout in the US or abroad.

New Zealand's immigration websites saw a huge uptick in traffic following the 2016 US election, with an increase of 2,500% in traffic just 48 hours after Trump has won the presidency, the Guardian reported last year.

Several ultra-wealthy US celebrities, including former TV host Matt Lauer and billionaire venture capitalist and co-founder of Paypal Peter Thiel have already snapped up multi-million dollar homes in New Zealand's swanky Wanaka area.

Thiel also owns another $3.1 million property in Queenstown, and has repurposed one of the home's walk-in closet into a panic room.

"New Zealand is already utopia," Thiel told Business Insider in 2011.
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Comments

  • KiwiValleyKiwiValley
    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.
  • CallumcafcCallumcafc
    Artificially supressing demand by barring foreign investors sounds like a good short term solution to me but long term, the solution has to be building more houses.
  • KiwiValleyKiwiValley
    Callumcafc said:

    Artificially supressing demand by barring foreign investors sounds like a good short term solution to me but long term, the solution has to be building more houses.

    Which is acknowledged as a partial solution. One problem is stopping investors getting in on the new houses.
  • MartinCAFCMartinCAFC
    edited August 2018
    Callumcafc said:

    Artificially supressing demand by barring foreign investors sounds like a good short term solution to me but long term, the solution has to be building more houses.

    Or you do something about the 2500% increase in traffic which is what New Zealand are doing and good on them for doing so.

    Build more houses? I already hate just how densely populated London is let alone somewhere a lot nicer like NZ.
  • ct_addickct_addick
    So nobody except for the Maoris can own property ?
  • KiwiValleyKiwiValley
    MartinCAFC said:

    Callumcafc said:

    Artificially supressing demand by barring foreign investors sounds like a good short term solution to me but long term, the solution has to be building more houses.

    Or you do something about the 2500% increase in traffic which is what New Zealand are doing and good on them for doing so.

    Build more houses? I already hate just how densely populated London is let alone somewhere a lot nicer like NZ.
    Someone has just bought our neighbours property and i am worried they'll be subdividing the land and building a house in the backyard. Which is a big trend now in NZ. It wouldn't be the end of the world. But you start to feel a little bit more cramped. There's a few less trees for the birds and more chance of noise and light pollution.
  • JessieJessie
    edited August 2018
    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
  • Big_Bad_WorldBig_Bad_World
    ct_addick said:

    So nobody except for the Maoris can own property ?

    Is everyone else in NZ born offshore, then?
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  • KiwiValleyKiwiValley
    JessieAddick said:

    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
    That’s an awful story @JessieAddick . Sounds really hard on the local people. A lot of the offshore buyers in NZ (a large percentage are Chinese) throw some crazy money at houses without having even viewed the house.
  • Curb_ItCurb_It
    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    This is what has happened here also isn't it? London housing has become unaffordable.

  • LincsaddickLincsaddick
    Denmark has had similar laws for years .. mostly forbidding/restricting non-Danes from buying property on the coast
    https://www.justlanded.com/english/Denmark/Denmark-Guide/Property/Property-purchases
  • cafcfancafcfan
    Is that even going to work? If so inclined, can't you just buy a property in the name of a NZ incorporated company and then "rent" it out to yourself?

    Anyway, I hope we go for some reciprocity and ban the 60k or so New Zealanders in the UK from owning property.

    We could start by kicking that twat Ross McEwan (CEO of RBS) out of his gaff and swiftly follow it up by evicting Dame Kiri Te Kanawa.
  • Rob7LeeRob7Lee
    It only applies to non residents, haven't looked for a while but you used to be able to buy (invest) that for 3m NZD/1.5m GBP.

    We'll never do that here I wouldn't have thought, although can see further changes to things like Stamp Duty much like on BTL which has had the desired effect of cooling that market, not that it's yet had much effect on overall prices but that's beginning to change in once popular BTL areas.
  • JessieJessie
    KiwiValley said:

    JessieAddick said:

    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
    That’s an awful story @JessieAddick . Sounds really hard on the local people. A lot of the offshore buyers in NZ (a large percentage are Chinese) throw some crazy money at houses without having even viewed the house.
    Yep I know. Some Chinese have way too much money. Wealth has been distributed unfairly for at least two decades.
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  • killerandflashkillerandflash
    Leroy Ambrose said:

    As with everything else, it isn't as simple as 'banning foreigners from buying'. Quite apart from the ludicrously easy methods of getting around it if you actually wanted to (as simple as getting someone local to buy it for you) there are knock on effects of this. In essence, if you tried to do it in London, developers would just stop building. They know full well that the vast majority of places in London are snapped up as by non-residents investing in a bubble. Stopping them from doing so would mean there's no incentive to build.

    The biggest problem with lack of affordable housing is the selling off of council stock, allowing people to buy their council houses for fuck all money and letting developers ride roughshod over the requirement to develop affordable housing as part of any scheme they put up

    If developers weren't able to build investment homes for foreign billionaires, maybe they'd then have to build property that ordinary Londoners could afford

    Battersea for example would have been the perfect place to build relatively affordable housing, the sort which ordinary people and housing associations could buy
  • Oggy RedOggy Red
    JessieAddick said:

    KiwiValley said:

    JessieAddick said:

    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
    That’s an awful story @JessieAddick . Sounds really hard on the local people. A lot of the offshore buyers in NZ (a large percentage are Chinese) throw some crazy money at houses without having even viewed the house.
    Yep I know. Some Chinese have way too much money. Wealth has been distributed unfairly for at least two decades.
    Can't you buy Charlton, Jessie?

    We're getting desperate, you know. :smile:

  • Leroy AmbroseLeroy Ambrose
    killerandflash said:

    Leroy Ambrose said:

    As with everything else, it isn't as simple as 'banning foreigners from buying'. Quite apart from the ludicrously easy methods of getting around it if you actually wanted to (as simple as getting someone local to buy it for you) there are knock on effects of this. In essence, if you tried to do it in London, developers would just stop building. They know full well that the vast majority of places in London are snapped up as by non-residents investing in a bubble. Stopping them from doing so would mean there's no incentive to build.

    The biggest problem with lack of affordable housing is the selling off of council stock, allowing people to buy their council houses for fuck all money and letting developers ride roughshod over the requirement to develop affordable housing as part of any scheme they put up

    If developers weren't able to build investment homes for foreign billionaires, maybe they'd then have to build property that ordinary Londoners could afford

    Battersea for example would have been the perfect place to build relatively affordable housing, the sort which ordinary people and housing associations could buy
    How are you going to force them into doing this?
  • JessieJessie
    Oggy Red said:

    JessieAddick said:

    KiwiValley said:

    JessieAddick said:

    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
    That’s an awful story @JessieAddick . Sounds really hard on the local people. A lot of the offshore buyers in NZ (a large percentage are Chinese) throw some crazy money at houses without having even viewed the house.
    Yep I know. Some Chinese have way too much money. Wealth has been distributed unfairly for at least two decades.
    Can't you buy Charlton, Jessie?

    We're getting desperate, you know. :smile:

    Well, if I win the £88 million jackpot... :wink:
  • randy andyrandy andy
    Leroy Ambrose said:

    killerandflash said:

    Leroy Ambrose said:

    As with everything else, it isn't as simple as 'banning foreigners from buying'. Quite apart from the ludicrously easy methods of getting around it if you actually wanted to (as simple as getting someone local to buy it for you) there are knock on effects of this. In essence, if you tried to do it in London, developers would just stop building. They know full well that the vast majority of places in London are snapped up as by non-residents investing in a bubble. Stopping them from doing so would mean there's no incentive to build.

    The biggest problem with lack of affordable housing is the selling off of council stock, allowing people to buy their council houses for fuck all money and letting developers ride roughshod over the requirement to develop affordable housing as part of any scheme they put up

    If developers weren't able to build investment homes for foreign billionaires, maybe they'd then have to build property that ordinary Londoners could afford

    Battersea for example would have been the perfect place to build relatively affordable housing, the sort which ordinary people and housing associations could buy
    How are you going to force them into doing this?
    Well you deincentivise the usual market for the higher end appartments, so increase taxation on BTL, introduce fines/taxes for properties left vacant (e.g. council tax is X, you pay 3X if there's nobody livin there, etc.), that lowers demand for that property time, thus dissuading developers.

    At the same time you introduce tax breaks for affordable home development and then you let market forces do they're work. Would a developer rather quickly sell 100% of homes prices, or wrap up all their capital in a slower selling development that may never reach 100% sold and incurs higher taxes to do so.
  • Oggy RedOggy Red
    JessieAddick said:

    Oggy Red said:

    JessieAddick said:

    KiwiValley said:

    JessieAddick said:

    KiwiValley said:

    New Zealand was once proudly a land of home owners. But house prices in some regions have more than doubled even tripled in the last 10 years. First home buyers are being pushed out of the first home market by baby boomer investors and higher up the housing market international money is having an effect as described in the article. Rent prices are going up because the baby boomer investors are wanting a return and to get funds to invest in other properties. It's a real bugger people can't afford to buy houses and renting can be crippling as well.

    I'm Chinese and I live in a city called Wuxi, near Shanghai. Around 2016 a large group of investors from a nearby city (Suzhou, which Stu probably knows where it is) flooded in and bought a lot of houses/flats here and house prices doubled in just a year's time! Most of them bought with mortgages so they only needed to prepare cash amount of no more than the down payment (20% at the time) and about a year's mortgage payments before selling the flat for a doubled price. And most of them didn't even wait for a year. Our bank's policy allows you to repay the full mortgage loan in advance starting from the sixth month and that was when almost all those people sold their flats and paid off the mortgages in full. They never came to live yet they made an immense amount of profit with the leverage that a mortgage facility provided and when they left our city the housing prices had gone significantly higher before their arrival. The prices had been going up nonstop since then and after a year our local government finally (reluctantly) introduced restrictions on non local residents' property buying activities. But the prices have never been going down.
    That’s an awful story @JessieAddick . Sounds really hard on the local people. A lot of the offshore buyers in NZ (a large percentage are Chinese) throw some crazy money at houses without having even viewed the house.
    Yep I know. Some Chinese have way too much money. Wealth has been distributed unfairly for at least two decades.
    Can't you buy Charlton, Jessie?

    We're getting desperate, you know. :smile:

    Well, if I win the £88 million jackpot... :wink:
    Fingers crossed then. Don't forget to buy a ticket! :smile:

  • ShootersHillGuruShootersHillGuru
    Key word in all of this is “money”. As long as the rules allow developers to rake in the cash by building what’s best for them to make a fat profit instead of building what’s necessary for the country then little will change. I wonder how many members of Parliament have interests in building development companies.
  • randy andyrandy andy
    ShootersHillGuru said:

    Key word in all of this is “money”. As long as the rules allow developers to rake in the cash by building what’s best for them to make a fat profit instead of building what’s necessary for the country then little will change. I wonder how many members of Parliament have interests in building development companies.

    Not sure how many are involved with developers, but 1 in 5 are landlords, so more than a little interested in the BTL market. In fact, it's the very reason that when the taxation laws around BTL were changed, they were primarily aimed at small time landlords with 1 or 2 properties. Larger landlords, raking in the big bucks, rather than just a nest egg for retirement, were largely untouched by the law changes.

    https://www.channel4.com/news/factcheck/almost-one-in-five-mps-are-landlords
  • killerandflashkillerandflash
    Leroy Ambrose said:

    killerandflash said:

    Leroy Ambrose said:

    As with everything else, it isn't as simple as 'banning foreigners from buying'. Quite apart from the ludicrously easy methods of getting around it if you actually wanted to (as simple as getting someone local to buy it for you) there are knock on effects of this. In essence, if you tried to do it in London, developers would just stop building. They know full well that the vast majority of places in London are snapped up as by non-residents investing in a bubble. Stopping them from doing so would mean there's no incentive to build.

    The biggest problem with lack of affordable housing is the selling off of council stock, allowing people to buy their council houses for fuck all money and letting developers ride roughshod over the requirement to develop affordable housing as part of any scheme they put up

    If developers weren't able to build investment homes for foreign billionaires, maybe they'd then have to build property that ordinary Londoners could afford

    Battersea for example would have been the perfect place to build relatively affordable housing, the sort which ordinary people and housing associations could buy
    How are you going to force them into doing this?
    Planning permission? Instead of 20% (barely) affordable, why not 50%?

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