Foreign buyer rules relaxed

Prior to getting into Government Labour talked up the effect of foreign buyers on the New Zealand housing market, and copped a lot of criticism for their ‘Chinese sounding names’ claims. They were also accused of exaggerating the impact of foreign buyers – and this has turned out to be true with foreign buyers being just 3% in recent statistics.

Once in power Labour restricted foreign buyers despite warnings of what that would do to discourage new housing developments. They have now partly backtracked.

RNZ:  Government relaxes rules on foreign buyer ban

The government’s overseas buyers’ ban on New Zealand homes has been softened, with some multi-storey apartment buildings now being exempted.

New Zealand officials and minister have also been negotiating with Singapore as the ban contravenes agreements between the two countries – that has now been resolved with Singapore securing an exemption, along with Australia.

Since the legislation has gone through select committees the government has acknowledged some fish hooks, that may have actually put the brakes on housing supply in Auckland.

Broadly, they apply to developers concerned about not being able to complete big projects if they can’t sell individual apartments to foreign buyers.

Another issue was overseas corporates getting caught up in the ban when they wanted to buy residential land – for example to build cell phone towers.

They were valid concerns, Trade Minister David Parker said.

“The advice we had from officials was that if we didn’t allow investment in apartment buildings then the whole complex was more likely not to proceed so there would be fewer purchase choices for New Zealanders,” Mr Parker said.

Parker has admitted they rushed to implementation of the changes and have had to reconsider when it became apparent it was having an adverse effect on trying to get more houses and apartments built.

Under the new regime, overseas investors would be able to invest in new housing, particularly apartments, new rentals, and homes available to purchase under rent-to-own or shared-equity arrangements.

The new rules allowed foreign buyers to purchase apartments ‘off the plan’ but they had to sell them once built. They can now retain ownership, but can’t live in them themselves.

This seems weird, especially when the government says they want to get more Kiwis into home ownership.

And the changes announced yesterday are still being criticised.

Phil Twyford in Opposition in 2016: Foreign buyers’ data selective and ineffective

The Government’s newly released foreign buyer data doesn’t give an accurate picture because it was collected at a time when offshore speculators had temporarily deserted the market, Labour’s Housing spokesperson Phil Twyford says.

“The Government is out of touch with the 70 per cent of New Zealanders that support Labour’s policy to ban offshore speculators from buying existing homes. National should back my Bill when it comes before Parliament next month, instead of supporting foreign speculators against the interests of Kiwi first homebuyers,” Phil Twyford says.

Twyford as Housing Minister in December 2017: Ban on overseas speculators a step closer

“This Government welcomes foreign investment in houses to add to our housing supply,” Phil Twyford says.

“However, purchases of homes by offshore speculators push first home-buyers and families out of the housing market.”

Phil Twyford says the legislative changes demonstrate the Government’s determination to make it easier for New Zealanders to buy their first home.

“We expect the law to be passed early next year fulfilling a key pledge in our 100 Day Plan. The previous National government said it couldn’t be done without breaching trade agreements. They just didn’t try and in doing so, they put foreign buyers ahead of New Zealanders.

“This Government prioritises home ownership and housing affordability for all New Zealanders. This Bill will ensure that house prices are set by New Zealand-based buyers, not international buyers,” Phil Twyford says.

The National opposition now say: Twyford’s numbers badly wrong on foreign buyers

“When challenged on the AM Show today and faced with official statistics, Phil Twyford failed to defend his previous stance that foreigners – particularly Chinese – dominated New Zealand’s property market,” Mrs Collins says.

“He originally claimed that 30 per cent of homes in New Zealand were being sold to foreigners. In the face of irrefutable evidence – he could not defend those numbers.

“Official statistics released yesterday show foreign house buyers make up just three per cent of New Zealand’s residential property market, exactly what the previous National Government maintained.

“In the lead up to the election Labour and Phil Twyford ran a scare campaign claiming buyers with ‘Chinese sounding names’ were not real New Zealanders deserving of a home and were responsible for ‘pricing first-home buyers out of the market’.

RNZ: Overseas house buyer problem ‘was never real’

Many developers are still opposed to a ban on the sale of existing homes to foreigners despite a slackening of the proposed new rules.

Only a fraction of New Zealand’s housing stock is foreign-owned and there are developers who think banning or restricting that investment discriminates.

In the first draft of the Overseas Investment Amendment bill, overseas buyers could buy apartments off the plans, but would have to sell them once the building was completed.

The new draft has softened that, now allowing developers to sell up to 60 percent of their apartments off-plan, without the requirement for buyers to sell within a year.

Official figures show nationally 3 percent of people who bought residential property in the last quarter didn’t hold New Zealand citizenship or resident visas.

Mr Church and other developers believe these figures prove the whole law should be scrapped.

“It indicates that the hyperbole around this issue being a much larger problem is just that, it was never real.”

Interestingly Twyford didn’t feature in yesterday’s announcement, it came from David Parker as Associate Finance Minister.

Foreign buyer screening law reported back

The Bill putting in place the Government’s policy of banning overseas buyers of existing houses has been reported back to Parliament by the Finance and Expenditure Select Committee.

Under the new regime, overseas investors will be able to invest in new housing, particularly apartments, new rentals, and homes available to purchase under rent-to-own or shared-equity arrangements.

“This will help first home buyers to get their foot on the property ladder,” David Parker said.

All permanent residents and resident visa holders who spend the majority of their time in New Zealand will be able to purchase homes under the regime without obtaining consent.

Australian and Singapore citizens and residents will be treated the same as New Zealand citizens and permanent residents.

Australia was always a special case. Singapore was not happy with the initial changes and also pushed for an exemption.

 

 

 

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42 Comments

  1. Blazer

     /  June 20, 2018

    anyone who really believes this is kidding themselves….
    ‘and this has turned out to be true with foreign buyers being just 3% in recent statistics.’.

    If they thought it was true you would not have had the continual carping from the usual parasites…wanting exemptions for Queenstown and so on.

    Spreading the average over the whole of NZ distorts reality as does the very loose net that fails to properly identify buyers that use companies,trusts and proxies.

    These measures are well overdue and more are needed.Try going to China and buying up their stock and see how far you get.

    National paid lip service to addressing property inflation.Why do you think Key lowered the cone of silence on discussing the huge profit he made on his Parnell property.
    This was the guy afterall who had a 4 point plan in 2007 to address the issue.

    LOTO squeaky Bridges has now decided there is a housing crisis.Typical.

    Now this Govt need to go further and copy the Canadian initiatives of levies and surcharges on empty homes,and tax idle land.
    Close the exisisting tax advantages that relate to property speculation/investment and we ‘re on the way to restoring the Kiwi dream for future generations.That’s the right thing to…do.

    Reply
    • Alan Wilkinson

       /  June 20, 2018

      Great idea. Let’s make houses cheaper by taxing them more. What could possibly go wrong?

      Reply
      • Blazer

         /  June 20, 2018

        Nothing can go wrong.
        Hopefully a few speculators will lose their …shirt.Unlikely though,as they use OPM.

        Reply
        • Alan Wilkinson

           /  June 20, 2018

          It’s already gone wrong including everywhere it’s been tried as well as here. Only the completely clueless won’t see that.

          Reply
    • PDB

       /  June 20, 2018

      When Blazer has to write something substantial (a rarity) you know in advance that he has been very wrong and is in full spin mode. Only 3% foreign buyers of which Chinese buyers are but a part of.

      Reply
      • Blazer

         /  June 20, 2018

        if its only 3%, legislation of any manner will be of no…concern…right?

        Reply
        • Gezza

           /  June 20, 2018

          This sudden turnaround does show the current administration has no idea of the impact of its policies & when they find out they have to implement panic measures that show that. This is I guess one way of teaching their Ministers they probably do need to read Cabinet papers. But they’re looking very shambolic & it’s no wonder business confidence is heading down. They’re making everything up on the fly.

          Reply
          • Blazer

             /  June 20, 2018

            there is no sudden turnaround at all.The key feature of Labours legislation is banning non resident buyers from purchasing existing housing stock.

            Allowing them to develop new builds is the smart thing to do.
            The ramifications of existing and pending trade agreements had to be considered.

            Reply
            • Gezza

               /  June 20, 2018

              Yeah, right. That’s what they always said to young kiwis looking to buy homes.

            • Blazer

               /  June 20, 2018

              how is this not a step in the right direction for young kiwi’s looking to…buy homes?

            • Gezza

               /  June 20, 2018

              Exactly.
              But how is this not selling houses to a handful of lazy greedy foreign opportunists?

            • Zedd

               /  June 20, 2018

              ‘Allowing them to develop new builds is the smart thing to do.’ sez Blazer

              I agree it is a better option than just saying ‘Bring you money & help yourself to it all’ what was the comment ‘kiwis are becoming tenants in our own land’.. so glad Natl were booted out !!

            • Blazer

               /  June 20, 2018

              @G…they are building NEW apartments,huge difference to hoovering up the existing stock.I’m sure you can see the difference.

            • Gezza

               /  June 20, 2018

              But aren’t they wealthy foreign rentiers making money out of renting them to kiwis?

            • Blazer

               /  June 20, 2018

              if they build them and the rent is mark to market ,everyone wins a.. prize.

              The previous 2 decades have seen demand outstrip supply and fortunes made while Govts stood by and…watched.33,000 empty homes in Auckland FFS.

              The reasons/excuses for that number are just not…credible.

            • PDB

               /  June 20, 2018

              Blazer: “they are building NEW apartments,huge difference to hoovering up the existing stock.”

              No – under the change foreign buyers can now buy apartments off the plan (i.e. existing stock) and keep them to rent out rather than have to sell them on once the building is complete – nothing to do with building them.

              Stuff: “The major change concerns apartments. Originally the ban would allow foreign buyers to purchase apartments off the plans, but would force them to sell them on once the building was completed.

              Now the ban will allow foreign buyers to hang on to apartments bought off the plan, as long as they are part of a development that is 20 or more units large”.

            • Blazer

               /  June 20, 2018

              PDB….’No – under the change foreign buyers can now buy apartments off the plan (i.e. existing stock)’……if you think a plan = existing stock’…get help.

  2. Yet another indicator that this coalition govt has NO idea of economics.

    Everybody else except them and other ideologues understood the need for foreign investment. What is it with the NZ left…it’s all open borders for uneducated economic migrants from the third world but it’s a close down on the security and stimulation of foreign fiscal investment.

    Reply
    • Gezza

       /  June 20, 2018

      It would be good to get the PM’s assessment of the situation before the baby comes. However the Deputy PM seems to think it’s a perfectly sensible minor adjustment. Or something like that.

      Reply
    • Blazer

       /  June 20, 2018

      selling NZ to overseas interests to enrich a handful of greedy,lazy opportunists is not an economically viable…plan.

      Reply
  3. Strong For Life

     /  June 20, 2018

    Another flip-flop from the coalition government.

    Reply
    • Blazer

       /  June 20, 2018

      its not actually…don’t let the facts get in your way…though.

      Reply
      • PDB

         /  June 20, 2018

        It is actually, and you’re flip-flopping with them. Economy is stalling , business and consumer confidence is down so get used to more flip-flopping by this mob.

        Reply
    • PDB

       /  June 20, 2018

      Just in the past week or so we have had 4 major flip-flops by this govt;

      *Foreign investors – flip flop.
      *Stopping foreign water bottling companies expanding & selling more water – flip flop.
      *Double-bunking in prisons – flip flop.
      *PPP for prisons – flip flop.

      Ardern is also racking up the lies after saying she’d never lie:

      Stuff: “Jacinda Ardern said Labour did not agree with PPPs when it came to building some core infrastructure like hospitals and prisons. However, there were areas where PPPs had worked for transport infrastructure, she said.”

      NZ Herald: “”We’ve always taken the view that things that are critical like hospitals, schools, corrections services should stay with the state,” Ardern said.”.

      Reply
  4. Grimm

     /  June 20, 2018

    It’s complete capitulation.

    They’ve backed away from the only reason they used to implement the ban in the first place.

    Reply
    • Blazer

       /  June 20, 2018

      learn the difference between buyers and…builders.

      Reply
      • Grimm

         /  June 20, 2018

        Can’t be easy, having to fight for a different position every day.

        Reply
        • Grimm

           /  June 20, 2018

          Even Bomber is calling it a “feckless u-turn”

          Oh the lols

          Reply
          • Gezza

             /  June 20, 2018

            I better look up feckless. That sounds like a word that probably describes Phil.

            Reply
            • Grimm

               /  June 20, 2018

              Not just Phil. Pretty much the only major policy they haven’t backed away from is free money for students. The first was TPPA, the latest is foreign investment. What’s tomorrow?

              The whole circus is insane.

          • Gezza

             /  June 20, 2018

            feckless
            adjective
            lacking initiative or strength of character; irresponsible.
            “her feckless younger brother”

            synonyms: useless, worthless, incompetent, inefficient, inept, good-for-nothing, ne’er-do-well; lazy, idle, slothful, indolent, shiftless, spiritless, apathetic, aimless, unambitious, unenterprising;
            informal: no-good, no-account, lousy
            “a feckless lot of layabouts”

            Reply
  5. David

     /  June 20, 2018

    I just about lost the will to carry on after reading Blazer..omg staggering.
    Anyway relaxing the ban on Jonny foreigner buying apartments is a start from the fuckwittery of this dumb government but Jonny will eventually want to sell his investment for a taxable profit but if his market is only domestic it’s still a shit place to invest..liquidating ones investment is almost the most important factor.

    Reply
    • Blazer

       /  June 20, 2018

      Jonny is parking his money in RE in stable democracies.
      Since the GFC ,the resultant QE has the wealthy awash with money that seeks appreciating assets.
      Couple that with a dash of money laundering and….!!

      Houses are homes for people to live in…not vehicles for speculators to buy up NZ while people are homeless and living in…cars.

      Reply
  6. David

     /  June 20, 2018

    Sitting here in New York I can take advantage of all sorts of clever stuff to invest to help the city provide housing for its workers. The far left Mayor and Govorner want the investment and they care not where it comes from and offer quite attractive tax advantages.
    NZ which needs vast investment rejects it and outside of communist countries is an outlier, and a dumb one at that. Why not use foreigners cash to build NZers homes.

    Reply
    • Blazer

       /  June 20, 2018

      Invest in New York then!!See how you go.You know where your breads buttered.

      Reply
  7. PartisanZ

     /  June 20, 2018

    In my ever increasing skepticism about governments-on-behalf, I’d say Labour-led have heard the sound of the corporate-elite’s ‘big guns’ hammer being cocked … at close range.

    Reply
    • Alan Wilkinson

       /  June 20, 2018

      Not so much corporate elites as investment money heading for the exits I would expect, PZ. They have no time for Ardern waffle and Peters b.s. Just the facts.

      Reply
      • PartisanZ

         /  June 20, 2018

        Yeah, like I said, ‘Big Guns’ …

        Now, of course, they’ll have to relax their stance on immigration to suit the foreign buyers.

        What we gotta remember is: Rogered did it. Ruthless did it. Aunty Helen and Saint Michael did it. John Key did it and WAS IT … So nothing has changed … You Righties should be happy …

        Turns out our last independent-minded PM was …. Rob Muldoon …

        Reply
        • Gezza

           /  June 20, 2018

          And he had legions of police drag Maori off their land at Bastion Point!

          Reply
          • PartisanZ

             /  June 20, 2018

            For a housing development I seem to recall …

            Oh well, there goes that idea …

            Norm Kirk perhaps?

            Reply
  1. Foreign buyer rules relaxed — Your NZ – NZ Conservative Coalition

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