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Thomson Reuters Foundation

A ban on foreigners buying homes in New Zealand is not enough to solve the problems of affordable housing and homelessness, analysts and campaigners said, as the country became the latest to impose curbs on non-residents buying property.
New Zealand’s parliament last week passed a law to bar many non-resident foreigners from buying existing homes in a bid to curb house price growth and reduce rates of homelessness.
The ban exempts Australians and may also exclude Singapore.
Foreign homebuyers in New Zealand made up about 3 per cent of property transfers overall, according to official data, which does not capture property bought through trusts.
Most buyers were from China and Australia.
New Zealand bars foreigners buying homes: Chinese blocked but Singaporeans are still allowed
Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, almost double in the past decade, and rise more than 60 per cent nationwide.
But reaction to the ban was mixed, with some analysts saying it may help boost affordability, while campaigners said it would not solve the more pressing problem of homelessness.

“It will take some price pressure off the top end of the market, which may trickle through to affordability at the lower end. However, it won’t have much effect,” said Timothy Hazledine, professor of economics at the University of Auckland.
“There definitely is an affordability problem, generated simply by the pressure of demand on a finite supply of desirable real estate. Bans on foreign ownership are a tiny step in this direction.”
The United Nations estimates that globally, at least 150 million people, or about 2 per cent of the population, are homeless. More than a fifth of the population lacks adequate housing.
Governments worldwide are under pressure to boost housing affordability and fix a growing problem of urban homelessness.
New Zealand PM back to work after maternity leave, will take baby to New York for UN meeting
Canada last year recognised housing as a fundamental right, and committed to creating up to 100,000 affordable housing units and providing financial help to some 300,000 low-income households.
India has pledged to provide housing for all citizens by 2022, with an aim to build 20 million urban housing units and 30 million rural homes, although activists say the programme does not address the problem of homelessness.
New Zealand has the highest rate of homelessness among wealthy nations that are part of the Organisation for Economic Cooperation and Development, with almost 1 per cent of its population living without a permanent shelter in 2015.

New Zealand Prime Minister Jacinda Ardern has unveiled an ambitious plan to build social infrastructure, including an extra NZ$634 million (US$425 million) for housing to help thousands of residents sleeping in cars and shop entrances.
This is on top of the NZ$2.1 billion previously announced to fund Kiwibuild, a government building programme to increase affordable housing supply.
The new law is unlikely to help the homeless, said James Crow at the advocacy group Gimme Shelter Aotearoa.
“Although this law allows a more level playing field for first homebuyers, these are unlikely to be the individuals and families sleeping in cars every night,” he said.
“The major issue remains around affordable rental accommodation, as most homeless are renters. Better access to first, emergency shelter and then long-term rental accommodation is a critical next step to resolving” homelessness, he said.
With at least 55 per cent of the world’s population living in urban centres, homelessness is ever more apparent, from Los Angeles to Auckland.
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This has fuelled resentment against foreign buyers who are accused of pushing up house prices, and often leave their properties vacant for several months of the year.
In London last year, squatters briefly occupied a mansion left empty by its foreign owner in one of the city’s most expensive neighbourhoods.
The New Zealand ban will not have “a significant impact” on house prices, said Bindi Norwell, chief executive at the Real Estate Institute of New Zealand, a lobbying body.
“Nor will it help young people into their first homes,” she said.
Instead, increasing supply, reducing bureaucracy, and easing mortgage restrictions for first time buyers are “more appropriate measures” to boost affordability, she said.
New Zealand is not alone, though: Switzerland has long had limits on foreign ownership of property, while authorities in Vancouver and Toronto have imposed foreign buyers’ taxes to cool house prices ranked as among the least affordable in the world.
While not always feasible, some controls on foreign buyers are needed on residential properties in big cities, said Chris Hamnett, emeritus professor at King’s College London.
“I welcome what the government of New Zealand has done – it is a way of protecting the residents and the housing future of a small country,” he said.


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New Zealand

Will banning Chinese and other foreign buyers solve homelessness in New Zealand?

New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. Photo: AP

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on Wednesday, Aug. 15 passed legislation that allows only New Zealand residents to buy homes as it attempts to improve housing affordability and increase the rate of home ownership. (AP Photo/Mark Baker)

New Zealand's Prime Minister Jacinda Ardern speaks during a press conference on her first day at Parliament in Wellington on August 6, 2018, after returning from maternity leave. New Zealand Prime Minister and new mum Jacinda Ardern, only the second world leader to give birth while in office, ended her maternity leave on August 2 and opted to work from home in Auckland until the weekend before relocating to the capital Wellington. / AFP PHOTO / Marty MELVILLE

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Reaction to the ban is mixed, with some analysts saying it may help boost affordability, while campaigners say it would not solve the more pressing problem of homelessness


Reaction to the ban is mixed, with some analysts saying it may help boost affordability, while campaigners say it would not solve the more pressing problem of homelessness.
