Auckland's market mystery

Reports of Chinese buyers snapping up large numbers of Auckland properties have been greatly exaggerated, according to a leading economist.

To be sure, New Zealand's clean, green image and vast openness is appealing to city-bound mainlanders and Hongkongers. As visitors, Chinese are arriving in record numbers - April's tourism figure was up 36 per cent year-on-year, pushing the sector to fivefold growth over a decade. And, according to Statistics New Zealand, China is the second-highest source of new citizens migrating to live and work in the country.

Auckland is clearly the target for Chinese buyers. Recent sales data shows that 19 per cent of overseas buyers of property in the north island's largest city are from China, adding more fuel to an already hot market.

Kerry Stewart, operations manager of Quotable Value, a New Zealand valuation and property information company, says a surplus of buyers and lack of stock is pushing prices up to meet demand. "We have seen instances of some properties selling for hundreds of thousands of dollars above their rating value," she says.

Indeed, Auckland's price increases are the highest in the land, jumping by more than 12 per cent in the past year. A survey of agents in which 45 per cent reported Chinese buyers as prevalent among foreigners buying in Auckland led to a predictable conclusion: that overseas money - most notably from China - was skewing values.

One Auckland city developer, Grant La Hood, says the impact of foreign buyers is "undeniable", and that "this has rightfully caused large-scale resentment towards foreign buyers investing in our housing market, and the government for their refusal to act on this issue".