Foreign buyers not shown the resi door?
PM Ardern campaigned hard about reining in the runaway horse of house values. This made sense because NZ’s median price rose by over 60% in the last decade and doubled in Auckland where there’s a chronic housing shortage and the average house costs over $1 million. Statistics New Zealand, says foreigners gobbled up 7.3% of Auckland’s homes in the March quarter… So how will our PM tame the beast?
Ms Ardern has just fired the first missive—banning foreign buyers from our residential property market. Taking foreigners away from auction day is what pointy-headed economists call “demand-side housing reform”. But, it’s not a full ban—they can still buy new apartments in large developments and multi-storey blocks. Just not houses — except for Aussies and maybe Singaporeans, but this is still being decided…
And this brings us to the flip side — foreign buyers usually focus on new developments. Their participation in the market encourages developers to build new stock and eases the problem of a housing shortage like Auckland’s. All this, as our population surges towards 5 million. Since last March, 100,000 people have chosen NZ as their safe, politically-stable place to live — the sharpest rise since 1974.