Foreign ownership needs closer scrutiny

Foreign ownership needs closer scrutiny

Auckland, New Zealand - 24th May 2015 - The Auckland Property Investors’ Association is calling for closer scrutiny and better understanding of overseas-based property buyers in order to address the stress of the Auckland housing market.

“It has to be a two-step process starting with a better understanding of exactly how many foreign buyers there are and to what extent they impact our housing market as well as the economy as whole. Are they investors who provide accommodation services and feed into the local economy? Are they absentee speculators who leave the houses empty and grossly inflate our prices?” says the Association's President, Andrew Bruce. “To me, there can be no credibility to any level of debate on this matter until we fully understand what we are dealing with.” Policies must then follow to preserve the fundamental value our community shares, that is the accessibility to housing for ordinarily Kiwi families as either homes or investments.

“Once we have that information, we can then really look at ways to level the playing field. Or indeed if the playing field needs to be levelled at all,” continues Bruce. “We are starting from a blank slate as by and large New Zealand is a fairly unregulated open society that attracts foreign interest. This needn’t be a hinderance but rather an advantage. We have a real opportunity here to make meaningful changes so that foreign investment promotes our economy and increases housing accessibility to all.” Some of the suggested policies being mooted include

• restriction on foreign buyers to buy only unbuilt building plans rather than existing houses in order to boost housing supply;

• additional taxes and duties that are directly funnelled into grants and subsidies for first-home buyers or the government to free up more land;

• some level of mandatory re-investment each foreign property acquisition has to make back into the New Zealand economy.

“Fundamentally in Auckland, there is a supply issue that underpins the current market stress,” says Bruce, “That said, if unfettered foreign ownership of our properties continues to be unchecked, we will be in danger of creating another boogie monster that will haunt the Auckland property market for years to come.”

The Auckland Property Investors’ Association is a non-profit organisation that supports local investors through industry advocacy and volunteer-driven education programmes.

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