Mixed reactions for Govt moves to lock out foreign residential property buyers

As the Government presses on with moves to shut foreigners out of the housing market, reactions are divided, reports Anne Gibson

The estate agent who sold this country’s most costly home is afraid of the global message when New Zealand bans foreigners from buying our houses.

“Are we seriously going to become fortress New Zealand and we absolutely want no one else to turn up?” asks Graham Wall, the agent who in 2013 got $39 million for a Paritai Drive mansion, sold to Chinese expat businessman Stone Shi, of the company Oravida.

“Whether you’re a refugee from Manus Island or a billionaire from Manhattan Island, we say ‘ you can’t buy a house here. We don’t want you here’. Who would have thought this outward-looking Government would be so inward looking? It’s hard to see how this legislation could free up one affordable house.”

Corporates will struggle to attract top executives from overseas, he predicts.

“If a big business hires an American IT manager and he’s going to be a good taxpayer and put his kids into private schools, he can’t buy a house here. I frankly think they’ll put it through and look at it in a year’s time and think ‘it’s too harsh’.”

New Zealand residential property will no longer be for sale internationally if the controversial law is passed.

That’s the clear message that could be delivered to foreigners seeking to buy into our $1 trillion-plus housing market if the new Government’s planned legislation gets through the House in the next few weeks.

Submissions on the Overseas Investment Amendment Bill closed on Tuesday. If it becomes law, it will deliver a strong “go away” to nonresidents and non-citizens wanting to buy any of our 1.85 million private dwellings.

But while real estate agents and lawyers fret about the planned change, one group is delighted.

For 42 years, the Campaign Against Foreign Control of Aotearoa (CAFCA) has been battling to keep New Zealand assets out of foreigners’ grasp.

Its outspoken organiser, Christchurch-based Murray Horton, this month expressed sheer delight at the proposed act, although he has reservations.

“The Government deserves praise for tackling aspects of foreign control as a high priority as soon as it got into office,” Horton says.

“But that is only as it should be, because it is an extremely important issue and one which has ramifications across a whole raft of other issues. Of course, [CAFCA] is pleased that it is banning foreign speculators from buying houses. But, really, this is what our American friends would call nickel and dime stuff.”

Horton notes that real estate agents say the ban is two years too late, and that foreign property speculators bolted from New Zealand as soon as the law required that they show a minimal connection to this country, by having an IRD number and a local bank account number. That measure was brought in under the previous National-led Government. “Still, better late than never.” He was pleased by last month’s Government announcement that it was t i ghtening rules on foreigners hoping to buy farms here.

But, he says: “Land sales, although they get a lot of attention, only involve tens of millions of dollars. The real guts of any modern economy — the high rollers’ lounge of the capitalist casino — is the business sector,” Horton says.

“That’s where the billion-dollar deals are done. And we’ve heard nothing from the Government about what, if anything, it plans to do about the transnational corporations that so dominate our economy, apart from the commendable, but comparatively minor, aim of trying to get them to pay their fair share of tax.”

Submissions on the planned law are yet to be officially released, but in its submission, the Property Council expresses concern about the Overseas Investment Office being under-funded and under-staffed, and applications taking months to process. “Substantially more resourcing” is needed, its submission says.

It wants mandatory time limits on applications, “particularly for residential developments of scale”. And those big estates should also get priority over other applicants, it says.

The draft legislation had gone too far by restricting not only the sale of