News World New Zealand passes ban on foreign homebuyers into law

New Zealand passes ban on foreign homebuyers into law

New Zealand’s parliament passed a law on Wednesday to ban many non-resident foreigners from buying existing homes, completing the Labour-led government’s election campaign pledge.

Jacinda Ardern, New Zealand’s popular 38-year-old prime minister, campaigned before September’s election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.

“This is a significant milestone and demonstrates this government’s commitment to making the dream of home ownership a reality for more New Zealanders,” Associate Finance Minister David Parker said.

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 percent nationwide.

House price growth has tapered off in the past year in part due to restrictions imposed on lending by the central bank, which was becoming alarmed at the potential financial stability risk of an overheated market.

Figures released by the Real Estate Institute of New Zealand on Wednesday showed median house prices had slipped 1.8 percent to NZ$550,000 ($360,140) in July from the previous month, although they were still 6.2 percent higher than the same time the previous year.

The government slightly relaxed the proposed ban in June so that non-residents could still own up to 60 percent of units in large, newly built apartment buildings but would no longer be able to buy existing homes.

The International Monetary Fund called on the government in July to reconsider the ban, warning the move could discourage foreign direct investment necessary to build new homes.

Official figures suggest that the overall level of foreign home buying was relatively low – about 3 percent of property transfers nationwide.

However, the data did not capture property bought through trusts and also showed property transfers involving foreigners was highly concentrated in certain areas, such as downtown Auckland and the southern scenic hot spot of Queenstown.

The majority of overseas buyers were from China and neighbouring Australia, according to Statistics New Zealand.

“Is the ban wise or useful? We think it’s neither,” said spokesman Dave Platter of Chinese real estate portal Juwai.com.

“Foreign buying … tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That’s vital in a market with a housing shortage, like Auckland,” he said.

The government has said the ban would not apply to Australians and has been negotiating with Singapore, whose free trade agreement with New Zealand allows foreign ownership, on whether to grant an exemption.

Top Stories

288 new cases of COVID-19, one death announced on Tuesday

The Health Ministry announced the death of one person due to COVID-19. This raises the death toll from the virus in Cyprus to 232,...

Health Minister and experts ‘concerned’ about increase in coronavirus cases in Cyprus

Cyprus` Minister of Health Constantinos Ioannou and the members of an advisory scientific team of experts on COVID-19 are "concerned" about a recent spike...

Cyprus unemployment at 7.6% in 2020

Unemployment in Cyprus in 2020 rose to 7.6% of the labour force compared with 7.1% the year before, pushed upwards by the fallout of...

Where to get a rapid test on Wednesday, 3 March

Aiming at the continuous surveillance of the community and the workplaces, the free programmes of rapid antigen testing of the general population and employees...

Health Ministry says students must have negative COVID tests

The Health Ministry issued a decree today regarding the operation of schools. According to the decree, every week the students of gymnasiums and lyceums must...

Taste

Squash soup

Ingredients: 1 kg pumpkin, cut into small cubes, approximately 5 cups 2 medium (400g) sweet potatoes, cut into cubes, approximately 2 ½ cups 1 chopped leek, only...

Mezedes

No visit to Cyprus is complete without enjoying the traditional meal of many small dishes known as ‘meze’. This large feast, which has been a...

Prawns with fried cheese, barley shaped pasta

Put the barley shaped pasta into a small pan with salted water, bring to a boil and when tender, drain. Peal the prawns leaving...

Salmon and shrimp sheftalies

Mix all ingredients for tabbouli in a bowl and keep to one side so flavours can combine. Prepare the sheftalies: wash and soak the casing...