Overseas buyer rise due to proposed ban
Thursday 7 June 2018
Property Institute chief executive Ashley Church
The proposed “foreign buyers ban” is to blame for an increase in Auckland property sales to overseas buyers in the March quarter, according to the Property Institute.
By Miriam Bell
Across the Auckland region, 7.3% of property sales or transfers in the first three months of 2018 were to people who were not New Zealand citizens or residents, new Stats NZ data shows.
This is an increase from the same time last year when property transfer data showed that about 5% of Auckland sales were to overseas buyers.
Further, in sought after central Auckland areas the percentage of property sales to overseas buyers comes in at nearly 20%.
In the Waitemata ward – which includes the CBD, Parnell, Grafton, Herne Bay, Ponsonby, Westmere - 19% of sales were to overseas buyers.
But Stats NZ property statistics manager Melissa McKenzie says the proportion of overseas buyers varies across Auckland.
For example, in contrast to Waitemata, just 1.7% of sales in Franklin went to overseas buyers, she says.
The Queenstown-Lakes district was even more popular than Auckland with overseas buyers: they were responsible for 9.7% of all property sales in the region.
Nationally, 3.3% of property sales in the March quarter were to overseas buyers. This was up from 2.9% in the December 2017 quarter.
McKenzie says it is possible that consultation on amendments to the Overseas Investment Act might be a factor in the increases in sales to overseas buyers.
But Property Institute chief executive Ashley Church says there is no doubt the Government’s proposed “foreign buyers ban” has led to the rise.
“The increases in sales to overseas buyers in areas like Central Auckland and Queenstown are no surprise.
“They are a knee-jerk reaction to the looming imposition of the foreign buyers ban. People are simply rushing to get into the market and buy properties before the ban comes into effect.”
Church is opposed to the foreign buyers ban as he believes it is unnecessary.
“If there ever was a problem with too many non-New Zealand buyers in the market, that problem has peaked and is in the past now.”
For REINZ chief executive Bindi Norwell, the overseas buyer figures confirm that it’s not worth going ahead with a blanket ban on foreign buyers across New Zealand.
She says the figures show the only areas in New Zealand where there was a significant proportion of sales to overseas buyers were Auckland and Queenstown Lakes.
Further, the 19% of overseas buyer sales in the Waitemata ward equate to roughly 85 sales and even if they were sold to local buyers it wouldn’t significantly impact on the overall market, she says.
“If foreign buyers are banned from purchasing property in New Zealand, it could significantly impact development funding.
“This would impact supply and, potentially, see prices increasing – the exact opposite effect the ban is seeking to have.”
Comments from our readers
No comments yet
Sign In / Register to add your comment
Auckland property is becoming increasingly attractive to buyers, according to ASB, after latest REINZ data revealed flattening prices continued into July.
Leases are at the heart of commercial property investment yet many people don’t take the time to understand them and suffer as a result.
The Reserve Bank surprised economists by signalling it may keep the OCR rate at 1.75% until 2020, pushing back its forecasts in a dovish statement this morning.