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.
Well, if I win the £88 million jackpot...
Fingers crossed then. Don't forget to buy a ticket!
Speaking of lottery, I did look it up a few weeks ago but only UK residents can play the national lottery games!
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%?
As alluded to above - this requires a change in policy. Since you're asking property developers to - in effect - subsidise social housing, and last I looked, property developers weren't noted for their benevolence and altruism, they'll simply stop developing. The planning system is - as anyone who has any experience of it can attest to - heinously rigged in favour of large developers as it is. I find it difficult to believe any of them would just accept the massive dent in their obscene profit margins this would entail.
So, in order to get this change in policy through, you'd require bigger subsidies from local authorities who have already had their budgets slashed to the bone through austerity (though in reality, the gutting of local authority spending has been going on for decades, so isn't just a tory policy). This would have to come at the expense of local services (local police budgets? Refuse collection? Highway repairs?). Failing that, it would have to be centrally funded by government (higher taxes)
As I said earlier, it's not as simple as it looks...
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%?
As alluded to above - this requires a change in policy. Since you're asking property developers to - in effect - subsidise social housing, and last I looked, property developers weren't noted for their benevolence and altruism, they'll simply stop developing. The planning system is - as anyone who has any experience of it can attest to - heinously rigged in favour of large developers as it is. I find it difficult to believe any of them would just accept the massive dent in their obscene profit margins this would entail.
So, in order to get this change in policy through, you'd require bigger subsidies from local authorities who have already had their budgets slashed to the bone through austerity (though in reality, the gutting of local authority spending has been going on for decades, so isn't just a tory policy). This would have to come at the expense of local services (local police budgets? Refuse collection? Highway repairs?). Failing that, it would have to be centrally funded by government (higher taxes)
As I said earlier, it's not as simple as it looks...
Governments, local authorities, the Mayor of London, they do have power to change things through planning.
If a developer is told that if you want to develop that lucrative site, 40% have to be affordable, they have the choice of making smaller but still good profits, or not developing at all. They can choose to sulk, in which case their projects will eventually dry up, or they can cooperate. Battersea, Mount Pleasant, both large sites where the mix of housing is wrong.
And by affordable, I don't necessarily mean all social housing, but "normal" housing as well, the sort where Londoners can actually buy to live in, as opposed to £2m properties aimed at overseas investors
The heading to the thread is not completely correct as it is ok for foreigners to own property if they build a new home. Also foreigners can buy apartments off the plan as long as they sell them when built (which sounds a bit strange but is what I read).
The Labour Party in their wisdom leapt on the bandwagon when in opposition during the housing boom about 18 months ago. Trying to illustrate the impact Asian buyers were having on the Auckland market and how local buyers were invariably being outbid at auction, they went back over the previous few months researching all the buyers in the Auckland area who had Chinese names! They came up with an astounding figure which seemed to prove their point until it was pointed out to them that Chinese are a valued sector of the Auckland community, some of them descendants of early settlers going back many generations.
To my mind Auckland’s property issue stems from a lack of transport infrastructure, not foreign investment. If you commuted 45 mins into the city like most do in the UK, houses are more than affordable and you get a decent plot of land. The trouble is the train network is terrible so the alternative is bus or car on already overcongested roads.
To my mind Auckland’s property issue stems from a lack of transport infrastructure, not foreign investment. If you commuted 45 mins into the city like most do in the UK, houses are more than affordable and you get a decent plot of land. The trouble is the train network is terrible so the alternative is bus or car on already overcongested roads.
Much of the Auckland suburbs are a dreary sprawl, as a city it takes up far too much space for the number of people living there!
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So, in order to get this change in policy through, you'd require bigger subsidies from local authorities who have already had their budgets slashed to the bone through austerity (though in reality, the gutting of local authority spending has been going on for decades, so isn't just a tory policy). This would have to come at the expense of local services (local police budgets? Refuse collection? Highway repairs?). Failing that, it would have to be centrally funded by government (higher taxes)
As I said earlier, it's not as simple as it looks...
It will be like buying in Bury.
Also, Bury ain't cheap. You want to look at Rochdale if you want cheap...
Mainly because any foreign reconnaissance mission would think it's already been hit!
If a developer is told that if you want to develop that lucrative site, 40% have to be affordable, they have the choice of making smaller but still good profits, or not developing at all. They can choose to sulk, in which case their projects will eventually dry up, or they can cooperate. Battersea, Mount Pleasant, both large sites where the mix of housing is wrong.
And by affordable, I don't necessarily mean all social housing, but "normal" housing as well, the sort where Londoners can actually buy to live in, as opposed to £2m properties aimed at overseas investors
The Labour Party in their wisdom leapt on the bandwagon when in opposition during the housing boom about 18 months ago. Trying to illustrate the impact Asian buyers were having on the Auckland market and how local buyers were invariably being outbid at auction, they went back over the previous few months researching all the buyers in the Auckland area who had Chinese names! They came up with an astounding figure which seemed to prove their point until it was pointed out to them that Chinese are a valued sector of the Auckland community, some of them descendants of early settlers going back many generations.
Say a nurse buys a small two bed for say 300k. Is there a limit on when they can sell the property and the price they can sell for?