Foreigners banned from buying homes in New Zealand

New Zealand has banned foreigners from buying homes as part of new efforts to curb spiralling house prices.

The government believe the ban will help lower the cost of homes.

“This is a significant milestone and demonstrates this Government’s commitment to making the dream of home ownership a reality for more New Zealanders,” Associate Finance Minister David Parker said.

“This Government believes that New Zealanders should not be outbid by wealthier foreign buyers. Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand not on the international market,”

Average property costs in NZ have risen by approximately 60 per cent in the last decade, while values have more than doubled in the country’s largest city, Auckland.

This reform is part of the NZ Government’s extensive programme to remedy New Zealand’s housing shortage and address the declining rate of home ownership.

That programme includes KiwiBuild, more social housing and the Urban Growth Agenda.

“This law will support investment in new homes, particularly apartments and homes available to purchase under innovative new models, which will help more New Zealanders achieve the Kiwi dream of home ownership,” the Minister said

The Bill also supports business investment and includes a streamlined approval process for the purchase of residential land for commercial purposes, whether they be supermarkets, hotels, or family-run dairies.

However, some critics of the bill have warned that the new policy risked stifling the economy and would not fix the problem of an overheating property market. The International Monetary Fund last month asked the government to reconsider its plans to ban foreign buyers, saying they thought it was unlikely to improve housing affordability in the country.

Foreigners who already own homes in New Zealand will not be affected by the new law, while overseas buyers will still be able to own up to 60 per cent of units in large, newly built apartment buildings.

Article published 16th August 2018