Data on overseas ownership of housing needed urgently

Green Media Release 7th June 2007

No-one knows what percentage of New Zealand’s towns and cities is owned by foreigners, says Green Party Co-Leader Russel Norman.

The Reserve Bank’s Monetary Policy Statement released today was unable to accurately quantify the impact of foreign ownership on the residential property market due to the lack of data on how much property is foreign owned. In light of this the Government must start collecting the data.

“The housing asset bubble is driving the Reserve Bank to increase interest rates, but we still have mostly only anecdotal evidence of the impact of foreign ownership on the housing market,” says Dr Russel Norman, Green Co-Leader and Economics Spokesperson.

“We know that overseas ownership of residential property is a significant driver of the housing bubble, but until the Government starts collecting the data we will not know how big a problem it is.

“The Reserve Bank believes that there is a rising trend of overseas ownership and that overseas ownership is particularly influential in particular regions such as Queenstown and south Waikato. It guesstimates that foreign ownership is no more than 5% of the market, but admits that its data is totally incomplete.

“We should be stabilising the housing market directly rather than using the blunt instrument of interest rates to try to stamp out inflation. Even if it were true that foreigners are only 5% of the market, if we were to remove 5% of the demand for housing by restricting ownership of residential land to New Zealand residents and citizens, then that would help stabilise the housing market.

“If we can stabilise the housing market directly then we don’t need to crush our manufacturing sector with high interest rates and a high New Zealand dollar. And ordinary New Zealanders would stand a chance of owning their own home.

ENDS

© Scoop Media