NZ could create foreign property buyer register

Posted by MarkL on March 15, 2015

With Auckland's housing market continuing to surge upwards the Government may follow Australia's example and establish a foreign property buyer register to try and curb soaring house prices. 

The Real Estate Institute of New Zealand (REINZ) recently announced that more properties were sold in February across New Zealand than in any February since 2007 - the height of the last property boom. They also announced the average Auckland house price had gone up by 14 per cent since February 2014. 

Auckland represented 70 per cent of all property transactions in April and elsewhere across the country median house prices hardly moved. 

Part of the force driving up prices is thought to be the number of overseas investors buying properties. 3 News reported more than 8700 New Zealand properties were listed on China's biggest property website. New Zealand is the fifth most searched country for property after the US, Australia, the UK and Canada.

Australia's recently introduced regime restricts foreigners to buying only newly-built houses, hasn't slowed price inflation there. However ex-REINZ  CEO Helen O'Sullivan told 3 News is could be because the rules weren't being enforced properly. 

"They have a process whereby you can apply as a foreign buyer to purchase new builds, [but] there isn't actually any enforcement process. They also don't have a register recording the ethnicity or the residency status, more correctly, of the owners of residential property.

"They have no way really of controlling whether or not established properties are being bought by non-Australians."

The Government here has been resisting calls to establish a similar scheme here, but will be keeping a keen eye on how it works over the Tasman.

Finance Minister Bill English said planning rules in Auckland are constraining housing development.

"We'll be looking at what they're doing in Australia but it's a bit of a distraction from the real issue, which isn't a few foreign buyers," he said.

"We're open-minded about whatever gives you more information."