New Zealand’s incoming Prime Minister has revealed that non-resident foreigners will be banned from purchasing existing homes in the country.
Jacinda Ardern announced the move in an attempt to tackle soaring property prices in the country. “We have agreed on banning the purchase of existing homes by foreign buyers,” she said, specifying that the new rules only applied to non-residents.
“(We) also have plans around farmland and other critical infrastructure,” she added
In recent years, New Zealand property has become particular sought-after by foreign purchasers, especially high net-worth individuals who view the country as something of a safe haven from a potential nuclear conflict, the rise of terrorism and civil unrest.
Land sales to foreign buyers are booming in New Zealand, with 465,863 hectares (1.16m acres) bought in 2016 – an almost six-fold increase on the year before.
The rise in New Zealand house prices over recent years has been fuelled by strong immigration, low interest rates and limited housing supplies. According to a recent survey by property consultants Knight Frank found annual house price growth in New Zealand was 10.4 per cent. This gave NZ the tenth fastest growing property prices of any country.
It is believed the announcement is being carefully monitored by ministers in other countries, including Australia and Canada, who could choose to implement a similar policy if this proves successful.
Article published 26th October 2017