Queenstown popular with foreign buyers

WELLINGTON: Queenstown was the most popular location for overseas buyers in 2018, although that demand tapered off once the Government effectively blocked foreign purchasers in October.

Foreign nationals bought 105 properties of the 1842 property transfers in Queenstown in calendar 2018, accounting for 5.7% of transactions, Stats NZ figures show.

That was more than the 2.6% national average — 3798 out of 146,073 — and trumped Auckland’s 5.6% rate, or 2361 out of 41,868 transfers.

Queenstown boasts one of the country’s most expensive streets, Speargrass Flat Rd, and commands an average property value of $1.19 million, up from $693,045 in 2014. Last year, it attracted international headlines as a favoured bolthole for Silicon Valley billionaires.

That foreign demand tapered off in the December quarter, which included the introduction of the Government’s ban on foreign buyers of residential property. In that period, foreign buyers accounted for 3.7% of Queenstown property transfers, down from 5.2% in the September period and 5.1% in the December quarter of 2017.

Foreign buyers accounted for 2.3% of all of New Zealand’s property transfers in the quarter, compared to 2% in the September quarter, and 2.9% a year earlier. ‘‘This quarter’s share of overseas home buyers is comparable to recent results, when transfers may have been influenced by discussions about Overseas Investment Act changes,’’ property statistics manager Melissa McKenzie said in a statement.

‘‘The latest quarter’s results may not fully reflect the impact of law changes that took effect on 22 October 2018, as transfers aren’t counted in our statistics until the contract is completed, which could take a month or longer,’’ she said.

Queenstown Lakes District Council had opposed the ban on overseas buyers, arguing that it undermined the local body’s strategy of attracting wealthy foreigners to develop a luxury property market.

Foreign interest in residential property was feared to be most acute in Auckland, where a shortage of new homes and cheap finance drove prices up, to the point where policymakers dubbed it a crisis. Overseas buyers accounted for 4.9% of transfers in Auckland during the December quarter, up from 4% in September, but down from 6% a year earlier.

Foreign nationals accounted for 1.2% of property vendors nationally in 2018, or 1785 of the 146,073 transfers. Queenstown again led the way, with 4.2%, or 78 of the 1842 transfers in the calendar year, and 3.1% in the December quarter.

❛ The latest quarter’s results may not fully reflect the impact of law changes that took effect on 22 October 2018 . . .