What New Zealand's ban on foreign property purchase means for you
November 19, 2018
New Zealand’s parliament recently passed a ban on non-resident foreigners from buying existing homes. Jacinda Ardern, prime minster, led the campaign in response to the rising house prices and increasing rates of homelessness.
The ban hopes to empower New Zealanders to own property at a fair price. The Overseas Investment Amendment Bill was passed in August and will take effect within two months of receiving formal approval.
With stunning scenic views, sunny weather for most of the year, and an education system ranked as one of the best in the world it’s easy to see the attraction. Wealthy investors have been largely blamed for the rising prices, buying into the property market to take advantage of all New Zealand has to offer. One of the largest cities in the country, Auckland, has suffered a staggering rise. House prices have almost doubled in the last decade, and the rest of the country has seen them climb 60%.
There has been some criticism to the ban. "Foreign buying ... tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That's vital in a market with a housing shortage, like Auckland," said spokesman Dave Platter of Chinese real estate portal Juwai.com.
Investors don’t want to lose out on opportunities and New Zealanders want to be able to buy property at a fair price. With the ban providing limitations on non-resident buyers what does this mean for you?
Right off the bat, if you are Australian or Singaporean, you won’t be affected by the ban due to complications around existing trade agreements. Previous investments in existing property prior to the ban will also be unaffected.
You will be able to purchase if you’re a resident visa holders who has been in the country for at least 183 days, with some stipulations. Difficulties are mainly with those looking to buy existing properties for investment. However, there are still opportunities out there. There are laxer requirements if you’re looking to purchase a new build property however. The government will allow foreigners to purchase a restricted number of newly built apartments. There are also opportunities in retirement villages, student accommodation and aged-care facilities. Even with these prospects, there is still the need for overseas buyers to convince regulators that whatever they do, they can offer benefits to the country.
New Zealand’s ban was prompted by a need to regulate the cost of housing, but still invites foreign investment with some limitations.
If you’re looking to move and would like advice on purchasing or renting a property abroad, then get in touch with us today.