A top kiwi economist is calling for Australians to be banned from buying property in New Zealand property, following allegations that Australian investors are contributing to the country’s skyrocketing house prices.
Research released by NAB-owned BNZ bank last week revealed that Australians bought more New Zealand property than any other overseas group.
BNZ chief economist, Tony Alexander, says Australians are the biggest single group of overseas buyers with 22% of all property purchases by foreigners, followed by the Chinese at 20% and British at 13%.
According to the New Zealand Herald, 8-9% of property sales in New Zealand go to foreigners and, while there are no exact figures showing the number of house purchases by foreigners, Real Estate Institute figures showed 7714 residential properties were sold last month. If that trend continued and around 90,000 houses were sold annually, about 8000 New Zealand houses could be going to foreign buyers.
Alexander told the New Zealand Herald that, if the issue is housing affordability, then special generalised Auckland or national imposts – such as minimum deposit rules – would only make things worse.
"One instead will need to take buyers out of the market which are not the ones we think deserve to buy affordable housing,” he argues.
"That means something like a law banning second property purchases, banning purchases by foreigners and forcing people to sell houses they own but are not occupying, perhaps because they are overseas."
However, Alexander admits the chances of his radical policy being adopted are ‘between low and zero’.
New Zealand Land Information Minister with responsibility for the Overseas Investment Office, Maurice Williamson, has rejected the idea possibility of a foreign buyer register. But the Herald reports that the office doesn’t have jurisdiction over most house sales and only handles $100 million-plus property deals, or those involving sensitive land such as ocean-front property or fishing quotas.
New Zealand is currently one of the few countries in the world which doesn’t impose a stamp duty in the form of a tax on a property purchase, that makes no capital gains taxation on property sales and that has no restriction on foreign ownership outside of the rules of the Overseas Investment Office.