Will foreign speculator ban work?

Tauranga-based New Zealand First list MP Clayton Mitchell believes the government’s ban on foreign buyers will help Kiwis get into the property market. File photo.

The government's announcement of a ban on foreigners buying existing residential housing has had a mixed response.

When SunLive revealed the news on Tuesday, Facebook users were quick to endorse the idea.

The story received more than 120 ‘likes', with comments including ‘Yay we are finally going in the right direction', ‘Yay!! It's about bloody time!!', and ‘Awesome news for kiwis'.

Tauranga-based New Zealand First list MP Clayton Mitchell says their position on this issue has been ‘pretty clear' from the moment the party was formed.

“As far as the housing crisis goes, this has been the elephant in the room right from the start. These changes will enable New Zealanders to have the first opportunity to buy property around the country.”

He believes it will make a huge difference to the shortage of housing.

“Foreigners will have to actually build a home, which creates opportunities for the building sector, and adds another house.

“It's a bigger problem in Auckland, but you have people from Auckland who have sold to foreign speculators coming down to Tauranga and putting pressure on our housing stock. So it will definitely cool the market down.”

However, Tauranga Property Investors Association president Simon Darmody doesn't believe the proposed changes will have much of an impact on the market.

“From what I see and conversations I have had, the number of foreign speculators purchasing properties anywhere outside of Auckland and Queenstown is a very, very low number.

“It is a very smart move from the government as gives the perception of doing something to stop the housing shortage, but in reality it will have negligible effect on prices or demand.”

He says if it encourages a ‘few new builds in Auckland or Queenstown', then the policy could be welcomed in those areas.

“I think the expectation of most people will be different to the reality, as they do not understand foreign buyers who are New Zealand citizens or residents will still be able to buy properties.”

National Party Finance spokesperson Steven Joyce says the government's announcement ‘raises many more questions than it answers'.

"The first and strangest thing about Labour's announcement is that it isn't an actual ban. Putting houses through a sensitive land purchase criteria is definitely bureaucratic but does not constitute a ban on such sales," says Steven.

"There are also all sorts of definitional questions. Is an apartment on the fourth floor of a building ‘sensitive land'? Is a two hectare property with two houses on it being sold for development able to be sold to an international investor?

"This proposal would also be a massive compliance cost for house buyers of all types. For example, will somebody with a foreign sounding name have to prove their citizenship to the real estate agent?

"The whole announcement was very strange. There has been no paperwork released and the Prime Minister indicated many of the detailed decisions remain to be made.



10 Comments

@ rushed decisions?

Posted on 02-11-2017 22:13 | By MISS ADVENTURE

Knee-jerk, crazy, meaningless add all the abvoe and some and that is modest. The basis of teh decsions no longer exists which means that it never was the casue in the first place. But that wont enter the air-heads anytime relevant! Regrdless the virtues and wonders of all that done will roll on mindlessly in continued and rampant stuper of self justifying dream world.

By CC8 - yes I suspect that your fiend is probably right!!

Posted on 02-11-2017 21:53 | By The Caveman

Very simple to say that a non-resident cannot buy a house / farmland in NZ, however unless the actual "finance" for the purchase is tracked back to the finance provider, then the non-resident condition is not worth the paper its written on. Its very simple for a non-resident to "loan" the finance to a "resident" and for the resident to purchase the property, in their own name. The non-resident has the real ownership, via the finance........................

informed comment.

Posted on 02-11-2017 20:32 | By phoenix

Wise words on Labors off-shore buyers Ban, reducing house prices. DUH

Political gesture

Posted on 02-11-2017 19:44 | By maildrop

Nothing more. It won't make a difference to house prices or rental prices. Those are set by the market. The figures show the level of foreign buyers is what, 5%? And the vast majority of those are then rented to Kiwis, at market price. KIWIS have driven the market up, not foreigners. And the few foreigners that have bought have not denied Kiwis a house because they rent them out to Kiwis. So, it will make no difference to the supply of housing. Of course, many Kiwis get confused as to what constitutes a "foreign" buyer, so the politicians play on this. Or maybe they are equally as stupid. The market is already starting to wind back so it's good timing for these ridiculous fools in power.

There is always a way around stupid legislation

Posted on 02-11-2017 18:10 | By CC8

When simplistic people ( ill advised politicians) make rushed decisions they invariably have little or no desired effect. Maybe it is a case of Newtons third law applying to all things in this world. I was told by a "foreign " friend today that his group of "buyer investors" already had a way around the issue ... he would not elaborate , but indicated that it doesn't really matter to them whose name is on the official NZ paperwork...

Nah

Posted on 02-11-2017 13:07 | By MISS ADVENTURE

They were a small part of a much bigger issue. The biggest issue (in Auckland) is the Unity plan that is effectively strangling development, progress with and the cost of. Add all that up and no option but to have skyrocketing prices as it si a simple case of restricted supply and constant demand, result prices must rise. But that is now reached a ceiling of affordability, so a corrction is now they next step. Lets see if the same people with all the "smartz" to do and support this and think its great have the same idea when the market turns dog, i.e. mortgagee sales. Not much use seeking to change ownership of homes if hey are then all mortgagee sale sold out of the house? Seems little point in that also in my view.

Yes it is the right direction

Posted on 02-11-2017 13:01 | By MISS ADVENTURE

However perhaps all could also note that the Auckland property market is already "at best" flatlining at present, if anything dropping already and well before the election. The decision will squeeze out a small number of buyers until they get a Permanent Residency approved. What many will have to face up to is that prices are going to drop, it is the economic cycle of things. When that happens (and in progress already) many are going to loose their shirt over it as they did in 2007-2008. History is about to repeat.

Tokoroa

Posted on 02-11-2017 12:49 | By NZer

Lots of 3 bedroom And even 4 bedroom houses for sale in Tokoroa for under $150,000 and its in drivable distance from Tauranga. Shuts up a lot of snobby I cant afford a house in Papamoa/ Tauranga people doesnt it.

What a joke

Posted on 02-11-2017 12:45 | By NZer

How can people say yah I will now be able to afford a house under Labour. Governments dont decide the prices of houses. People do. International buyers are not buying market entry level houses. How will this help lower prices and free up entry level house?

Dont

Posted on 02-11-2017 12:35 | By Tikety boo

I don't take any notice of what Steven Fiscal Hole Joyce says anymore.

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