Overseas owners sold 66% more NZ dwellings than they purchased in Q3 this year - but Statistics NZ's figures are still woefully incomplete

Overseas owners sold 66% more NZ dwellings than they purchased in Q3 this year - but Statistics NZ's figures are still woefully incomplete

Overseas people continue to sell more homes in this country than they are buying, according to the latest information from Statistics NZ.

It said 186 dwellings were purchased by overseas buyers in the September quarter of this year, about the same as the 183 that were purchased in the June quarter, but well down from the peak of 1116 that were purchased in the June quarter of last year.

But in the September quarter of this year overseas people sold 309 New Zealand dwellings, meaning they are now net sellers of New Zealand residential property by a substantial margin, which is a complete turnaround of the situation prior to the beginning of this year when they were net buyers by a substantial margin.

However the Statistics NZ figures give an incomplete picture of overseas buying activity and for that reason may be misleading.

For example they do not include transfers where the owners were a corporate entity such as a company, regardless of where a company is registered and whether its shareholders and directors are based in this country or overseas.

And property transfers made by trusts are not included when at least one of the trustees is a New Zealand resident or citizen.

Most trusts operating in this country will have at least one NZ resident or citizen as a trustee, usually an accountant or lawyer, regardless of where the trust's settlors or beneficiaries are based.

That makes it likely that most transactions involving trusts are not included in Statistics NZ's foreign buyer figures.

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13
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Good to see. Adding to the supply.
They are probably adding more to the supply side now than KB!

16
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If they are selling empty houses so a family can live in it then this will be good news.

Depends what price they pay dictator? Does the capital leave the country in the hands of the selling foreign buyer, and then the interest paid on debt by the new FHB to an overseas owned bank? Is this positive news for NZ going forward?

While the data is inadequate and unlikely as to the true extent; the number of sales would seem to be far, far less than 10,000 (5 per house average) to 20,000 (3 per house) houses required to house net annual immigration numbers.
However, the sales are a positive in terms of the impact on prices and affordability.

20
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People in the know are aware that nz properties are not worth its value on paper..

The big issue here is that Statistics NZ needs to re-establish its reputation - following the 2018 Census debacle........

I fear this could take some time.

TTP

19
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Without including companies and trusts - this data is just saying: "Your calorific intake has reduced remarkably! But we didn't include any calories from sugar, processed foods, dairy, meats, your waffle addiction, maple syrup. Actually this is just a measure of the calories you obtained from silverbeet. You're doing great!"

Yea Stats NZ is on a par with the oracle goat and the swiss guinea pig that forecasts World Cup matches. Except the oracle goat doesn't get to revise his predictions. And the swiss guinea pig could probably manage a census better.

"An overseas person is:
a trust where 25% or more of the governing body or those with the right to control the composition of the governing body or control the trust deed are OP, or where an OP has a beneficial interests in or entitlement to 25% of more of the trust’s property."

I don't think appointing a NZ based Trustee gets you around the ban if the beneficiary is an OP? Am I reading this wrong?

Yep it's incredible to think how much times have changed in just a few short years. AL Jazeera documentary: China's Home Invasion: The Hunger for Global Real Estate | 101 East https://www.youtube.com/watch?v=oFcsFOKXsFU

We also know that the number of rich people buying NZ residency through the $10m investment trick increased by almost 50% over the last year (166 -> 243). Highly likely that many of them bought one or more properties.

Highly likely that many of them bought one or more properties.

Why is it "highly likely"? Is there some data that supports this probability?

Nope, I don't have the stats on that. "Highly likely" is simply my opinion. Seems very reasonable to assume that if someone is bothering to park $10m in NZ for 3 years for the purpose of attaining residency there's a good chance of them buying a property.

And anecdotally of course, there are various reports of wealthy foreigners establishing boltholes in NZ, e.g. Peter Thiel being one well publicized example.

166->243 wealthy migrants. I agree that money will end up in real estate. I have to say I'm pretty disappointed. Immigration is through the roof. Then there was the TPPA. Then the government reversed Nationals clampdown on the parents of migrants coming here. There are so many back flips my head is spinning.

There will more (CHCH) properties being sold under market value!

Chairman Man?

Chairman, great, can you give me some address’s

23
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It's now clean money leaving the country.

11
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Aotearoa - land of the large white washing machine

Well, its what that bastion of NZ Chinese industry F&P Haier is known for...

10
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With out tax free gain, time to Bail Out.

In US dollar terms Auckland houses have gone down significantly over the past year. Tough time to sell unless they'd been in a good while.

The experiment begins now with the marginal buyer now becoming the seller.

Foreign Buyer Ban is in place than how come so many Chinese, once again are active in Auction specially in Eastern beach, Bucklandbeach, Howick, Pakuranga and nearby area (Area I have witnessed and cannot vouch for other area).

May be through trust as can appoint one local friend or relative as trustee and buy ( May be am wrong) as definitely have found a way around foreign buyer ban, Check with RE Agent in the area and privately (off the record) will vouch for it.

Seems like old time, when illegal money was being parked (money laundering) - may be government is aware of the loophole that is being used but now as want ecenomy to rock as JK said, they too are interested as elections are approaching - No wonder will try to remove LVR along with no capital gain to inflate house price.

Wait and Watch, how now, government systematically try to boost house price/ speculation as election approaching.

Anyone noticing how so many government departments are malfunctioning after the previous government apparently wrecked them? Hard to monitor or enforces anything if the relevant department isn't actually functioning...NZTA, Stats NZ, WINZ, Housing NZ....what a shambles.

There's little incentive to hold real estate investments in NZ at the moment given it's new punitive tax treatment and current economic uncertainty. There's probably more value buying somewhere else if investors insists on real estates.

If you're just laundering money these things don't matter.

Exactly, I'm sure plenty of money launderers would be stoked with 70% return of capital even if it involves selling a property for 40% below market value. Get enough of them going and watch values slide.

Lets not kid ourselves , my Daughter has had to move twice in two years into the third house with her flatmates as Asian investors have sold up .

And her rent which was $590/week in 2017 is now just under $1,000/ week for a 3 bed house on the shore.

My eldest son who is looking to rent a place with his partner, cannot find anything suitable to rent on the shore , and has given up trying .

Cheer up Boatman, just think for every rental property your Daughter has been forced to move out of is now likely a First Home for one of her peers. Hence the tenancy agreement wasn't carried over.

Lol @ $1000/week for 3 bed. Not a market reflection.

Quick trademe search:

North shore, 3 bdrm+ . 401 results, 350 below $1000. 241 below $750.