NZ moves to ban foreigners from buying homes
WELLINGTON, New Zealand — Prime Minister Jacinda Ardern said on Tuesday a ban on foreigners buying existing homes would begin in early 2018, but the restrictions would not apply to Australians.
Ardern campaigned in the recent New Zealand election to restrict foreign buyers to reduce demand, while the country tackles what her Labour party said is a housing crisis left unresolved by the previous National administration.
“We are determined to make it easier for Kiwis to buy their first home so we are stopping foreign speculators buying houses and driving up prices. Kiwis should not be outbid like this,” Ardern said in a statement, using the colloquial term for New Zealanders.
The politically sensitive housing crunch has seen prices rise more than 50 percent nationally in the last decade. In the city of Auckland, prices have almost doubled in that period. The central bank sees fast-rising prices as a major economic risk.
The ban would not apply to Australians, Ardern said, given New Zealanders are exempt from homeownership restrictions in neighboring Australia, where many New Zealanders live.
Ardern told reporters that legislation would be introduced in parliament by Dec 25.
The restrictions were being fast-tracked so that Labour would not have to renegotiate foreign investment provisions in the Trans Pacific Partnership deal, after a long series of talks to revive the agreement since the United States pulled out in January.
The TPP currently requires its 11 member states to give foreign investors equal treatment to locals unless there are specific exemptions.
New Zealand had no such grounds for an outright ban on overseas investment in housing, but its Overseas
We are determined to make it easier for Kiwis to buy their first home so we are stopping foreign speculators buying houses and driving up prices.”
Jacinda Ardern, New Zealand’s prime minister Investment Act is exempted from the trade deal.
By adding housing to that legislation, Labour will be able to go ahead with the ban without having to request any changes to the TPP when ministers meet on the sidelines of Asia-Pacific Economic Cooperation meeting in Vietnam next week to finalize the agreement.
Ardern said that New Zealand would instead focus on renegotiating rules allowing investors to sue member countries included in the TPP, though she acknowledged it would be difficult to get large changes so late in negotiations.
The opposition National Party said the so-called ban raised more questions than it answered.
“This is a policy that’s designed to solve a political problem,” said Steven Joyce, the National Party’s finance spokesman. “Evidence in both Australia and here in New Zealand is that overseas buyers don’t have a significant impact on the housing market.”