12 June 2006

Foreign owners could be edging Kiwis out of property market

News that the falling New Zealand Dollar may be fuelling increased investment in the New Zealand property market by overseas buyers is being greeted with concern by the Green Party.

The latest property figures from Quotable Value show that house prices rose by 12.4% in the year to May. While growth in the sector is slowing, prices remain high, and reports have suggested that the growth is being fuelled by foreign buyers attracted by the low New Zealand Dollar.

"If this is the case, it is bad news for ordinary Kiwis," Green Party Foreign Investment and Housing Spokesperson Sue Bradford says.

"Foreign investors dealing in stronger international currencies are able to take advantage of our weak dollar to edge local buyers out of the property market, artificially driving up prices in the process. This is disastrous for New Zealanders looking to buy a family home," Ms Bradford says.

"It is not fair that ordinary Kiwis are missing out on owning their own homes because foreign buyers are looking to make an easy dollar on our property market. New Zealand is one of the few countries that does not put controls on foreign investment, and this clearly needs to change.

"However, the question of how to address this is made extremely difficult by the fact that the Government doesn't monitor sales to foreign investors, meaning it's impossible to get a clear picture. I urge the Government to follow the recommendation of the Finance and Expenditure Select Committee in August to monitor property purchases by foreign investors so their impact on New Zealand's housing market can be properly evaluated," Ms Bradford says.

ENDS

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