Media Statement for immediate release

29 July 2013

First home buyers push up property prices more than foreigners

Labours policy to restrict foreign ownership of existing New Zealand houses will reduce demand for property. The big question is by how much and whether it will have a large impact on property prices.

A study by BNZ Chief Economist Tony Alexander suggests that the impact of foreign buyers in New Zealand is small, suggesting Labours policy will not have a large effect on property prices. However more research needs to be undertaken to accurately determine the level of foreign purchases.

“Despite the likelihood that Labours policy will only have a small affect, it appears fair that if a New Zealanders cannot purchase property in any particular country then their citizens should not be able to purchase ours” says NZPIF President Andrew King.

“Although everyone wants to help first home buyers get into their own home, ironically it appears that they are having the largest affect on property prices.”

According the REINZ, in the year to March 2013 there were 10,883 more property sales than in the year to March 2012. During that same period, 10,733 people withdrew their Kiwisaver funds to use as a deposit on their first home.

ENDS

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