Buy and build for foreigners
A Queenstown property expert believes Government plans to restrict foreign home ownership will increase much-needed rental stock in the resort but says the property market is a little nervous.
Colliers International valuation and consultancy director John Scobie said the level of foreign ownership of houses in the region was unknown but estimated to be between 10 and 20 per cent.
Under the new rules, overseas purchasers would be able to buy and build but not buy existing houses.
‘‘The hope is that it provides more rental product...future [overseas] purchasers will have to find something to build, and put more stock in the markets.’’
That could solve some problems for Queenstown, where there was huge demand and not enough supply, he said.
Rents had been unaffordable for quite some time, he said.
‘‘Hopefully we see an easing of that.
‘‘We’re just losing too many people - specifically your teachers, firemen, policemen, that type of thing. They’re integral to the community and we’ve got to keep them here.’’
Other changes were likely to impact the market also and, with such a small base in Queenstown, it was possible the supply and demand imbalance could turn very quickly.
‘‘Certainly in the Auckland market it’s been dropping off, though not quickly. We tend to follow that market and be about 10-12 months behind.’’
Projects like Ladies Mile becoming a Special Housing Area would also bring more stock into the local market, he said.
He did not think there would be any major change in property values as a result of the changes. ‘‘But you never know. No one saw the [Global Financial Crisis] coming.’’
There was some concern in the property market, he said.
‘‘If anything the market has been quiet prior to the election. No one likes uncertainty.
‘‘But now they’ve said what they’re going to do, though there’s still a few questions about how it works...It’s become more certain and people understand what’s going on and will move forward.
‘‘It seems the market has picked up a bit in terms of value so that’s great and there’s a lot of development around on the drawing board.’’