Ban on foreign buyers seen as poor answer to New Zealand's housing shortage
Blocking foreigners from buying homes in the country is still being questioned as the solution to affordable housing and homelessness
Many foreigners will be banned from buying homes in New Zealand from this week, unless they are newly built flats, as the Labour Party-led government fulfils an election promise that critics say could be a popular but will not solve the lack of affordable housing.
Housing became a major campaign issue during an election last year that ended the National Party government’s near decade in power and landed Jacinda Ardern the premiership in a surprise result.
Ardern had blamed overseas speculators for driving up prices, making it unaffordable for many young Kiwis looking to buy their first home. Nationwide prices have risen 60 per cent in the last decade, and in Auckland, the largest city, prices are almost double.
But critics say the Labour-led coalition’s answer to the problem – banning foreigners – will not make a big enough difference in a market where economists reckon there is a shortage of around 100,000 homes.
“Increasing the level of supply, speeding up the consenting process, creating consistency at councils around New Zealand and reducing LVR [loan to value] restrictions for first time buyers are all more appropriate measures that will help with affordability ahead of banning offshore investors,” said Bindi Norwell, chief executive at the Real Estate Institute of New Zealand.