GDP Down - Let’s Harness NZ’s Winning, Covid-free Status
“There’s a lot of talk about how to orchestrate a supposed soft-landing for the property market if domestic demand starts weakening. The answer could lie in carefully easing the foreign buyer ban - even temporarily or for specific regions or housing stock,” says Derryn Mayne, Owner of Century 21 New Zealand.
The real estate boss’s comments follow StatsNZ revealing that GDP fell by one percent in the last quarter of 2020 which indicates the country is now likely to be technically in a recession. The drop in gross domestic product was worse than expected.
Regardless, she says, New Zealand’s international image is flying high with its near-free Covid-19 status, not to mention its successful America’s Cup defence and regatta. She says rather worrying and waiting, the Government should strike while the iron is hot
“International internet searches about moving and investing here are at an all-time high. At the same time, public servants have been tasked with dreaming up new policies and stimulus initiatives to ensure the Kiwi property market keeps ticking away. I think a much quicker and simpler option could be revisiting the 2018 foreign buyer ban, even in part,” says Ms Mayne.
“Immigration has come to a screeching halt and all non-residents are banned from buying existing homes anywhere in the country period. With GDP down, and concerns that Kiwis have so much invested in the property market, let’s look at strategically reopening the door to foreign buyers for at least some parts of the country,” she says.
The Century 21 leader says with Queenstown facing a post-pandemic economic crisis, an injection of offshore investment in that property market would make a real difference. Other regions, or even types of housing stock, could also be exempted from the Overseas Investment Amendment Act.
She says when the legislation came into force in October 2018 its impact was swift and significant. Any policy reversal would equally have a quick and demonstrable impact if properly timed and targeted.
“Not only are we viewed as a safe haven, but so too is our property market. The Government now needs to harness New Zealand’s red-hot attraction and allow some more offshore capital in. If domestic demand for housing is going to weaken this year, then carefully filling any gaps with overseas investment, will help sustain New Zealand’s all-important property sector,” says Derryn Mayne.