New Zealand Foreign Property Investor Ban Amended

Following a campaign by REINZ the New Zealand Foreign Property Investor Ban has been amended.

The New Zealand government has softened the impact of the legislation against overseas property investors by rewriting a proposed law banning non-residents from investing in housing.

Foreign ownership had attracted criticism in recent years as New Zealand grapples with a housing crisis that has seen average prices in the main city of Auckland almost double in the past decade and rise more than 60 per cent nationwide.

This led the government to promise in their election campaign to clamp down on house price growth by introducing a ban on foreign buyers.

However, following the campaign by the Real Estate Institute of New Zealand (REINZ) lobbying for an amendment, the government has now agreed.

The newly amended law will now allow non-residents to own up to 60 per cent of large, new apartment buildings.

The amended bill will also exempt Singaporeans from the foreign ownership ban under a free trade agreement (FTA) between the two countries. The government had already confirmed that Australians would be exempt.

Up to date official figures have shown that the overall level of foreign home buying was relatively low – at about 3 per cent of property transfers nationwide but was highly concentrated in certain areas such as downtown Auckland and the southern scenic hotspot of Queenstown.

It is felt that the amendments in the New Zealand foreign property investor ban show the government’s hope of attracting foreign investment in large residential developments to tackle a shortage of housing that has driven up prices and rents.

Despite the amendments, REINZ have restated that they remain wholly opposed to the ban.

REINZ chief executive Bindi Norwell, Chief Executive said: ‘We don’t believe that the ban will resolve any housing affordability issues given the proportion of sales to overseas buyers is so low.’