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New Zealand

One in five central Auckland homes sold to overseas buyers

The New Zealand government is in the process of amending the Overseas Investment Act to stop foreign speculators buying houses which would otherwise be available for New Zealanders

PUBLISHED : Thursday, 07 June, 2018, 3:39pm
UPDATED : Thursday, 07 June, 2018, 3:40pm

By Isaac Davison

New figures showing one in five central Auckland houses are being sold to offshore buyers vindicates the Government’s coming ban on foreign ownership, the country’s Trade Minister David Parker says.

Responding to the latest Statistics NZ data on property sales, Parker said foreign investment was highest in the regions where housing was least affordable.

In all, just over three per cent of house sales in New Zealand for the first three months of the year went to non-resident, overseas-based buyers.

The rate of foreign purchases was higher in Auckland, at 7.3 per cent, and in Queenstown, at 9.7 per cent.

Parker said that corresponded with the two places in New Zealand where people were facing the biggest hurdles to home ownership.

In the Waitemata region, 450 properties were sold to foreign buyers. That amounted to 19 per cent of the sales in the area, which includes the Auckland CBD, inner city suburbs and Waiheke Island.

Parliament is considering legislation which will block people living overseas from buying existing New Zealand homes.

While the Stats NZ data did not provide a complete picture of foreign ownership – it does not include purchases by companies – Parker said it was all the evidence he needed.

“Whether it’s iconic places beside South Island lakes or properties in the most socio-economically deprived parts of Auckland, the principle is the same: New Zealanders should not be outbid by ... people who don’t live here.”

Bindi Norwell, chief executive of the Real Estate Institute of New Zealand, said the figures were not high enough to support a foreign-buyer ban, despite higher numbers in some regions.

“In our view, the figures from Statistics NZ confirm that it’s not worth going ahead with a blanket ban on foreign buyers across New Zealand,” she said.

“The only areas in New Zealand where there is a significant proportion of sales made to people who didn’t hold New Zealand citizenship or resident visas are Auckland and Queenstown Lakes with 7.3 per cent and 9.7 per cent of sales respectively.”

Although Statistics NZ highlighted the 19 per cent proportion in the Waitematā ward to overseas buyers, Norwell said this was unlikely to significantly impact the overall market.

A spokesperson for Statistics NZ said consultation about amendments to the Overseas Investment Act may have been a factor in a recent increase in the proportion of sales to foreigners.

It was noted that “the proposed changes could make it more challenging for overseas buyers to purchase residential land in New Zealand”.

In the March 2018 quarter there were 40,740 property transfers, including 32,880 home transfers.

Almost four in five of the homes were sold to at least one New Zealand citizen. The other one in five were sold to corporate entities, resident-visa holders, and overseas buyers.

The data also showed house sales were down 2.4 per cent on the year while property sales were down 2.8 per cent on the year.

Statistics NZ has taken over the task of publishing the home transfer statistics from Land Information New Zealand.

The organisation began publishing quarterly property transfers and tax residency reports to try obtain a better picture of the housing market, after growing concerns that foreign buyers were pushing up house prices.

In 2015, then Labour leader Andrew Little caused controversy when he released figures showing a high proportion of Auckland house sales to people with Chinese names.

At the time, Little said it was time to “blow the whistle” on what was happening in Auckland, however the data was criticised as “shonky”.

Read the original article at The New Zealand Herald