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Home transfers to overseas people steady in September

Almost 190 homes were transferred to people who didn’t hold New Zealand citizenship or a resident visa in the September 2019 quarter – relatively unchanged from the June 2019 quarter, Stats NZ said today.

Home transfers to people who didn’t hold New Zealand citizenship or a resident visa peaked at over 1,100 in the June 2018 quarter when proposed government restrictions on these buyers were being discussed. This fell to 717 in the September 2018 quarter, shortly before restrictions on the sale of residential property to overseas people came into force. There were fewer than 190 transfers to overseas people in each of the June and September 2019 quarters.

“Home transfers to overseas people have fallen significantly since changes to the Overseas Investment Amendment Act came into force, settling around 0.5 percent of all home transfers for the last two quarters,” property statistics manager Melissa McKenzie said.

“Home transfers to overseas people are unlikely to ever reach zero, though, because of exemptions for Australians, Singaporeans, and some property developers and overseas-based apartment investors.”

For information about exemptions, see Overseas Investment Amendment Act 2018 (Land Information New Zealand).

“Auckland accounted for over half of all home transfers to overseas people in the September 2019 quarter, including 72 home transfers in the Auckland inner city (Waitematā). Some of the inner-city home transfers may be apartments bought off the plan before the law changed, but the transactions were completed in the latest quarter,” Ms McKenzie said.

“While relatively few overseas people are now buying property in New Zealand compared with a year ago, nearly 3,700 homes were transferred to only corporate entities in the latest quarter, for which we don’t know the citizenship or visa status of the owners, and a further 3,000 homes were transferred to at least one resident-visa holder.”

“Resident-visa holders’ share of transfers has remained relatively steady at about 8 percent for the past two years.”

Frequently asked questions

How many ‘foreigners’ are buying New Zealand homes?

It depends how you define ‘foreigner’. In the September 2019 quarter, of all home transfers:
• 81 percent were to at least one NZ citizen
• 10 percent were to corporate entities only (which could have NZ or overseas owners)
• 8.2 percent were to at least one NZ-resident-visa holder (someone who can live and work in New Zealand for as long as they like)
• 0.5 percent were to no NZ citizens or resident-visa holders.

When we talk about transfers to ‘overseas people’, we mean the 0.5 percent of transfers where none of the buyers were NZ citizens or resident-visa holders (excluding transfers where all the buyers were corporate entities). We focus on this measure because it aligns most closely with the definition of ‘overseas person’ in the Overseas Investment Act 2005.

What about the Overseas Investment Amendment Act 2018?

The new Act affects contracts signed from 22 October 2018. As transfers are not counted until completed, it wasn’t as obvious in December 2018 quarter statistics.

The new Act prevents most people who don’t hold NZ citizenship or a resident visa from buying residential property in New Zealand. For further information see Overseas Investment Amendment Act 2018.

Why is the number of home transfers to overseas people not zero?

The number of home transfers to overseas people may never be zero due to Overseas Investment Act exemptions (for example, some new homes, and Australian and Singaporean buyers).

Some contracts signed before 22 October 2018 may take many months before they are completed and counted in these statistics. Apartments bought off the plans may not be transferred to an overseas buyer until construction is complete years after the contract was signed.

How many of the corporate entities have ‘foreign’ owners?

Information on the ownership of corporate entities (by New Zealanders or overseas people) is not currently available, as it is not collected on land transfer tax statements.

How are trusts captured in these statistics?

We count a trust based on the visa or citizenship status of its trustees. If at least one trustee holds NZ citizenship, then the transfer is counted as a transfer to a NZ citizen.

How much New Zealand property is owned by ‘foreigners’?

We do not currently have a register of property owned by overseas people. These property transfer statistics measure overseas involvement in property transfers in any given quarter, but not the total amount of property owned by overseas people.

Can transfers of bare residential land be identified in these statistics?

No, we can’t currently identify bare residential land in these statistics, but it is included, along with homes, commercial, and other land, in total property transfers.

Is the Overseas Investment Act being enforced?

The Overseas Investment Office enforce the Overseas Investment Act. For information on applications by overseas people to buy New Zealand property see Decision summaries and statistics. For information on enforcement where overseas people have bought property without appropriate consent see Enforcement action taken.

What about ‘foreign’ buyers in Australia?

The Australian Foreign Investment Review Board (FIRB) reports on approvals of purchases by overseas buyers.

For further information see Foreign Investment Review Board (FIRB) 2017–18 Annual Report.

Why do you talk about ‘transfers’ not ‘sales’?

A transfer is not the same as a sale. Transfers often involve a sale, but there are many other possible reasons for a transfer (such as marriage settlements, boundary changes, trustee changes, and changes in the share of ownership).

Every sale is a transfer, but not every transfer is a sale. We refer to the parties involved as buyers and sellers for simplicity.

We know the number of transfers to overseas people because this information is collected on land transfer tax statements, which cover all types of transfer and not just sales.

Aren’t there lots of people missing from these numbers?

We have information about the visa status or citizenship of virtually all people who transfer property in New Zealand. The only uncertainty is around the ownership of corporate entities that transfer property.

In addition to statistics about the visa status or citizenship of people who transfer property, we also publish statistics about their tax residency. The tax residency statistics include a large category for parties that are exempt from stating their tax residency on a land transfer tax statement (for example, because the transfer involves their main home). The visa and citizenship statistics are not affected by this exemption, because these people are still required to state their visa or citizenship status.

Tax residency is not the same as nationality. We advise focusing on the statistics about visa or citizenship status (also known as affiliation).

What is the net change in ‘foreign’ ownership of New Zealand property?

We don’t produce a measure of the net change in property owned by overseas people.

If you subtract seller statistics from buyer statistics to calculate a net change in home ownership, it is important to note that:
• between the time of buying and selling a home, owners can move between affiliations (for example, a work-visa holder could become a resident-visa holder or NZ citizen)
• some types of affiliations may sell many newly built homes (for example, corporate entities).

Therefore, net changes for a given affiliation could be understated or overstated.

Text alternative for Home transfers by buyer citizenship or visa status, New Zealand, September 2017 to September 2019 quarters

This stacked column graph shows the number and percentage of home transfers by buyer citizenship or visa status (at least one NZ citizen, at least one NZ resident visa but no citizens, corporate only, and no NZ citizens or resident visas). Also indicated is on 14 December 2017 the Overseas Investment Act (OIA) amendment bill was introduced to Parliament, on 22 August 2018 OIA amendment got Royal assent, and on 22 October 2018 OIA amendment came into force.

Data for this graph is available on table 1 of the following file.

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