21 November 2012

NZ at risk of overseas investors driving up house prices

New Zealand needs to follow the lead of Hong Kong and place restrictions on overseas buyers’ ability to purchase real estate here, Green Party Co-leader Dr Russel Norman said today.

Hong Kong has imposed a 15 per cent emergency tax on foreign buyers of residential property. Hong Kong took this step after investors from Mainland China drove up prices creating a housing bubble.

"Real estate agents in Auckland are raising concerns that overseas buyers are driving up house prices in Auckland,” said Dr Norman.

“Many of these buyers may not even be intending to live in the homes they have bought.

“Australia also has restrictions on overseas buyers purchasing residential properties. Overseas buyers cannot buy established dwellings as investment properties or as homes, unless they meet certain strict criteria.

“The situation as it stands in New Zealand is that foreign buyers only need approval under certain conditions such as when the deal is worth more than $100 million dollars.

"Our weak overseas investment laws mean New Zealand is a good place to speculate in property for overseas investor.

“This situation may be great news for real estate agents but in an already tightly squeezed market, is bad news for New Zealand home buyers.

“Reducing price pressure from overseas investors is just part of the Green Party’s solution to making housing more affordable,” Dr Norman said.

“A capital gains tax (excluding the family home) will further reduce speculation while greater government investment in affordable housing, a warrant of fitness for rental properties, and assistance for first home buyers will ensure more Kiwi families get to live in warm, healthy homes.”

ENDS

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