Key, English agree better data collection on foreign ownership of homes would be better; won't rule out collecting data; Labour says National 'wobbling'

By Lynn Grieveson

The Government appears to be softening its stance on recording data on the number of foreign buyers of residential property, with both Prime Minister John Key and Finance Minister Bill English saying it would be useful, although difficult, to gather more precise information about the residential status of house buyers.

The potential impact of foreign buyers on house prices, particularly in Auckland, is shaping up as the hot topic of debate in the election despite the lack of statistics about how many non-residents are buying residential property.

“At the moment everyone works on the principle of a number of assumptions, and they are assumptions made by real estate agents and others”, said Key to reporters outside National’s caucus meeting this morning.

“It's not perfectly good information and there would be lots and lots of ways of confusing that information because it depends on what structure they buy those houses under," Key said.

"It could be credible to go and try and get better information, but that would probably require a change in the way we record that data," he said.

He said no decisions had been made about how information would be gathered and recorded.

“We would have to record it. It's not that we have the information and we don't share that information.”

“I don't think it's a register. What I said yesterday is, you know, there might be an argument for looking at whether we get better information, but that's something we haven’t really closely looked at.”

But he refused to rule a register out, saying: “We could do lots of things, but in the end I don't think that's the driving issue. I think that's a bit of a red herring when it comes to the housing market. The truth is if you want to fix the housing market you have to follow the prescription we have been - which is much greater supply.”

English also warned reporters that too much focus on foreign buyers could distract from what he sees as the “real big issues for the housing market”, which are a lack of supply and “councils and communities who prefer not to grow and who have historically restricted the availability of housing."

But he also refused to rule out setting up a register or gathering statistics on foreign buyers, saying it would be “a matter for the ministers in cabinet to discuss”.

“Oh, look, we can discuss it. It's come up in a number of different ways in recent years including in purchasing of farmland. There's a few surveys out there, but we haven't done any specific work on it,” English said.

“Look, you can always have more information about things. I think, as the Prime Minister indicated yesterday that, of course, it’s possible. But the information we have at the moment tells us it is quite a small proportion of buyers, maybe as few as two in every hundred houses in Auckland and the big issues with housing aren't the home address of buyers. The big issue is that we have many New Zealanders wanting to buy houses and the supply of houses isn't flexible enough to deal with that demand."

English denied he was backtracking on previous refusals to consider a register, saying: "No, I haven't done a u-turn. You can always have more information. The point here is that we need more supply of houses. That is actually the big issue. That's what we focused on. If people want more information about the addresses of who the buyers are, well there is no particular reason why you shouldn't do that ... It would be a much more complex exercise than someone like Winston Peters says but more information always helps us to know a bit more."

"More information is always better than less information. There's just a danger here of losing focus on the big issues for the housing market.”

Both Key and English reiterated their belief that the number of non-resident buyers was relatively small, estimating it at around 2% of house sales. Key claimed that even BNZ economist Tony Alexander, who has called for Australian-style restrictions on the sale of housing to offshore buyers, did not believe it was yet a big factor in New Zealand.

"Even Tony Alexander on the best information he's had, if you distill that and you take out the exemptions that Labour have got, we think it might be kind of 2 %," said Key.

"His (Alexander's) argument is it's a very long term issue. His actual argument to me was it's not really a problem today, it could be a problem a lot further down."

National 'wobbling' on the issue

Labour Deputy Leader David Parker said National now seemed to be “wobbling” on the issue, joking that they “must have focus grouped” voter views on collecting data about foreign buyers.

“It looks like they are moving in that direction,” he said.

“I can’t tell you what they’ll do, but they are certainly wobbling.”

“They are scrambling around on housing policy. Their housing policy is a sham. Houses in Auckland are about to breach the average price of NZ$700,000. That’s why the Prime Minister is scrambling around looking at things he previously rejected.”

Policy debate needs to be informed

Green Party leader Russel Norman said the question of whether to gather data on non-resident house buyers was "very straightforward".

"Obviously there should be official statistics kept about what is the level of foreign buy-up ... broken down by the different markets," he said. "That would mean that we could have this policy debate about foreign pressure on the housing market in a much more informed manner."

"At the moment the statistics we are using are relatively limited. In those countries where they do keep statistics they are seeing a very significant influx of foreign investors and foreign buyers of housing. There's no doubt it is a significant part of the demand side for housing in New Zealand and if you strip that out it would have a significant effect on prices and would stabilise or lower prices".

(Updated with video of question in Parliamentary Question Time, comments from David Parker and Russel Norman)