Foreign buyers purchased 630 NZ homes last year and sold 1482

Property / news

Foreign owners selling their NZ homes at about twice the rate they are buying them

7th Feb 22, 6:00am by Greg Ninness

Foreign owners continue to sell their New Zealand residential properties at about twice the rate they are buying them.

According to the latest data from Statistics NZ, foreign owners purchased 174 New Zealand dwellings in the December quarter of last year but sold 339.

Their purchases represented just 0.4% of all residential property transfers in the quarter while the disposals accounted for 0.8%.

Foreign owners are defined as people who do not have have NZ citizenship or a residency visa.

Since the Overseas Investment Amendment Act came into effect in October 2018, there have been severe restrictions on the ability of foreign owners to buy residential dwellings in this country.

That considerably reduced the number of purchases by foreigners, which dropped from 1038 in the December quarter of 2017 to 174 in the December quarter of this year, a decline of 83%.

However the sale of New Zealand dwellings by foreign owners has declined less dramatically over the same period, dropping from 468 in the December quarter of 2017 to 339 in the December quarter of 2021, down 27.6% (see graph below).

In all of 2021, 630 NZ dwellings were purchased by foreign owners and 1482 were sold.

That compares to 3369 dwellings purchased in 2017 and 1770 sales in the same year.

However the Statistics NZ figures do not give a complete picture of foreign buyer activity, because they exclude purchases made through a company structure, even if the ultimate owners are non-NZ citizens or residents, and they also exclude most purchases made by trusts.

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49 Comments

by Officebound | 7th Feb 22, 7:31am 1644172272

Is it still National's policy to repeal the foreign buyer ban?

I imagine that's not much of a vote grabber these days...

by Gummy Bear Hero | 7th Feb 22, 11:30am 1644186656

... I'd be happy to see our entire housing stock sold to offshore investors at current prices ...

Let them be holding the bag when the musical money go round stops ... and the bubble pops ...

by HouseMouse | 7th Feb 22, 11:32am 1644186727

Nice to see Gummy again with the wit

by AKLCrusader | 8th Feb 22, 10:07am 1644268045

Labours decision to ban foreign buyers was targeted at the 0.3% of sales which were to foreigners or those with Chinese sounding names. There, fixed it!

Oh wait, Kainga Ora is buying a higher share of the housing stock each year. Should we ban them from buying because they are pushing the prices up? No, lets blame it all on investors instead and introduce new taxes. There, fixed it!

Oh wait, data today shows that investors sold less than expected but purchases by investors dropped by 50%. There fixed it!

Oh Wait, the CCCFA is stopping first home buyers who dare to buy coffee or takeaways.

Great job Labour!

by ozzzy2 | 8th Feb 22, 8:45pm 1644306342

Well, the Labour parties motto is, 'Lets Keep Moving' lol

by nktokyo | 7th Feb 22, 7:37am 1644172650

Good to see the property market righted itself after this policy was brought in.

by HW2 | 7th Feb 22, 9:00am 1644177609

Just happened to coincide with the seven to ten year cycle peak. The market was plateauing from late 2016... the real problem are the feeding frenzies that happen and continue to draw in more and more buyers.. labour made it about race with the "Chinese sounding names" joke.

by kpnuts | 7th Feb 22, 8:26am 1644175613

they were clearly making a huge difference and glad they stopped and no more 25% annual house price rises

bit like their Gun Crime legislation that has led to a 400% increase in Gun crime ...

Or how all the Foreign campers are trashing our environment --

Clueless really

by KH | 7th Feb 22, 8:27am 1644175631

Given the incomplete definition of what is a foreign buyer, who knows what really is happening.

by CWBW | 7th Feb 22, 8:44am 1644176688

"Foreign owners are defined as people who do not have have NZ citizenship or a residency visa."

Not good enough a definition for you?

What do you suggest?

by KH | 7th Feb 22, 10:14am 1644182097

CWBW. Beneficial ownership, Trusts, companies etc.

Politicians loaded the current definition to minimise the appearance of foreign ownership. As well discussed here on interest.co

Any decision or viewpoint relies on accurate info. You have a problem with that position CWBW ?

by CWBW | 7th Feb 22, 11:00am 1644184823

Those are based on conspiracy theories. Clearly you didn't know at least one director has to be a Kiwi.

Even if we proved all that buying are Kiwis, new conspiracy theories will evolve like a Kiwi citizen who really isn't really a Kiwi or that Kiwi has another citizenship.

If you want to get technical, every company and trust that is established in this country is classified as Kiwi.

Your conspiracy theory is unproven and a red herring.

by linklater01 | 7th Feb 22, 11:57am 1644188242

CWBW,

You really can't be that simple minded can you? remember the Panama papers? Do you really believe that we have done away with all the behind the scenes financial transactions inherent in the world of tax havens?

The fact that a Kiwi has to be involved means nothing more than a lawyer's signature and a fee. We are not squeaky clean-far from it.

by Notgreedykiwi | 7th Feb 22, 8:40am 1644176412

How many citizens and residents who don't live in NZ but have properties and keep buying more in NZ?

Huge capital gains with no tax in NZ, so easy way to park the money and get gains.

And lots of these houses are just kept empty or rented for short term holiday homes. And locals living in the country complain of housing shortage.

Something to be done about this? Probably not because we have self preserving politicians. They should be called pickels not politicians.

by GV 27 | 8th Feb 22, 7:36am 1644258987

Talking about offshore New Zealanders owning property isn't the done thing. In fact treating them like anything less than gods is apparently a huge no-no, according to our overseas-based Kiwis who love to lecture us on what New Zealand values and fairness actually is. How would we know, we just live here.

by AKLCrusader | 8th Feb 22, 10:16am 1644268567

Well, if the government wasn't taxing income without deducting expenses, or removing the property rights of owners, or generally making life harder for landlords, perhaps people might make different decisions.

I sold a house after the law change, it saddened me that a family lost their home of 3 years, with below market rent and and decent clean, warm and spacious house for their family. I could not afford to keep it, how did that help them?

I've retained one rental with an elderly resident who was there long before I owned the house, rent has not increased in 10 years, she can't afford that. The governments changes mean that I'll pay tax at my marginal rate on that rent even though it is less than the interest costs. Do I sell up, lift the rent to market value, or take it off market and rent under the table? Who wins? Nobody.

by CWBW | 7th Feb 22, 8:41am 1644176469

"Since the Overseas Investment Amendment Act came into effect in October 2018, there have been severe restrictions on the ability of foreign owners to buy residential dwellings in this country."

🥇 This is gold! 🥇

Since October 2018 to December 2021, the median house prices in NZ has approximately risen 61.2% (or compounding at 1.23% monthly).

If we look at this from the face value of the inverse relationship; you can't be blamed for visualising the irony that less foreign buyers resulted in higher prices!

Looks like xenophobia does pay well for those who aren't.

by jim hansford | 7th Feb 22, 9:54am 1644180890

The catch phrase of the great and groomed, 'xenophobia'. It is not xenophobic in a democracy for voters and tax payers interests to be prioritized over non voters and non taxpayers. In fact it should always be policy. It does seem somewhat perverse and intellectually weak that someone would use the term xenophobia to describe these actions.

But the fact stands that the stats are dead... propaganda if you will. Without an accurate definition of foreigners in trusts and companies, and what they have bought, these numbers are meaningless, quoted continually to yet again pull the wool over peoples eyes.

by Independent_Observer | 7th Feb 22, 11:14am 1644185644

What CWBC means to say, but doesn’t say it directly is that ‘I want foreign buyers back to add demand to the market in order to further increase my personal wealth/housing investments and be damned to anyone born and living in NZ who can’t afford to buy…as a person I’d happily sell our country away in order to enrich myself…my personal wealth in the short term is more important than the collective future prospects of NZ residents/citizens in the long term’

by J.C. | 7th Feb 22, 12:39pm 1644190752

What CWBC means to say,.....

Can you blame him? Property bubbles are addictive for the ruling elite and the hoi polloi. To be honest, just as bad in Aussie and far worse in places like Vancouver when you look at the influence of foreign buyers, particularly from China. But if you've paid any attention to what's going on in China, the tide is turning fast. They have their own property crash to deal with.

Property bubbles are stupid and destructive. People haven't learnt anything over the past 20 years.

by Shoreman | 7th Feb 22, 11:48am 1644187693

Cwb That's Gold for sure, ridiculous really incompetent Government but hey I'll take the 5-6 mil paper gain on our properties.

Of course there were people predicting doom back then too !

by Jaf | 7th Feb 22, 12:27pm 1644190029

Any possibility of the real figures of foreign buying being fudged cos of the loophole in the legislation? A switch in foreign buying in their actual names to buying under a company structure or trusts or even through proxies who are residents in NZ? Any spike in numbers under the latter? The figures trotted out in the article MAY not tell the real story until and unless we have the corresponding figures on the other side. In the meantime I would not read too much into the current figures of "foreign-ownership" and rush into hasty conclusions. https://www.straitstimes.com/singapore/courts-crime/woman-admits-flouti…

by AKLCrusader | 8th Feb 22, 10:20am 1644268849

The numbers were minimal even when this legislation was rushed out as the solution.

Kainga Ora is buying a higher share of properties in the market, and paying above the odds, is it any wonder pricing is rising fast?

by HouseMouse | 7th Feb 22, 10:33am 1644183186

Clearly, foreign property purchasing has a marginal influence.

The bigger issue I have is the number of Chinese interests that own large, strategic land parcels- which could supply a lot of housing- and land banking. Seen this a lot at Albany, and it has also occurred with large well located sites in New Lynn, St John's and central Auckland.

by singautim | 7th Feb 22, 10:58am 1644184685

The adjective Chinese can be left out and the sentence remains consistent. If Chinese was replaced with English or Eskimo or Botswanan, would it make any difference? Is the difference in the assumption that the Communist govt of China is more diligent and capable at defending its wealthy citizens interests than other countries?

by HouseMouse | 7th Feb 22, 11:09am 1644185362

Well, the reality is that most of those properties ARE Chinese owned.

But sure we can 'de-ethnicise' it if you please.

In my 25 years in and around the development sector, this land banking behaviour is much more common from foreign interests as opposed to local ones.

I don't know if there's a solution or not. A land tax probably wouldn't help much, still peanuts relative to gains in land value.

The government could compulsorily acquire the land and start facilitating development. That's likely to have little if any political downside (as compared to buying say 50-100 individual properties)

by J.C. | 7th Feb 22, 12:41pm 1644190903

Well, the reality is that most of those properties ARE Chinese owned.

They're just playing the game by the rules that your own leaders created. And if they can tipped for their efforts, that's the way it goes.

by HouseMouse | 7th Feb 22, 12:54pm 1644191677

Fair point.

If NZ lets offshore interests buy massive urban properties near train stations and services, does not compel them to develop, and the only upside is a fairly small rates and tax revenue stream, then that's NZ's fault.

by CWBW | 7th Feb 22, 11:12am 1644185529

He has no proof on the marginal influence nor it is the Chinese.

by HouseMouse | 7th Feb 22, 11:35am 1644186905

Ok, so working in the development sector and knowing of at least 5 major strategic development sites(2 of which I have worked on in the past 3 years) in Auckland is not 'proof'. That's an 'interesting' view.

by GV 27 | 8th Feb 22, 7:38am 1644259105

I'm not sure what it proves though. One of our biggest home-building outfits is owned by the Chinese Government. There would be a lot fewer new homes coming to market if it weren't for Universal Homes.

by Brock Landers | 7th Feb 22, 11:17am 1644185825

One only needs to examine the diversity of estate agents in Auckland to understand what's been going on.

by Gummy Bear Hero | 7th Feb 22, 11:36am 1644187016

It's irrelevant whether we ban " foreign " property investors or not , if we continue with restricted land supply and construction ...

... " foreigners " were not pushing up house prices ... poor local council policies were ... dreadful central government policies were... ultra loose central bank policies were ...

Fix them ... forget targeting the wrong enemy ... the enemy lies within , not without ...

by HouseMouse | 7th Feb 22, 11:55am 1644188158

Add world leading levels of immigration

by muzled | 7th Feb 22, 4:13pm 1644203622

All so Christopher Luxons dream husband could bang on about our 'rockstar economy'

by AKLCrusader | 8th Feb 22, 10:22am 1644268970

So the fact that pricing has accelerated while the borders were closed - how does that support your prejudice?

by HouseMouse | 7th Feb 22, 1:10pm 1644192607

Just 188 covid cases today. What's explaining the lack of escalation in numbers?-

by Brock Landers | 7th Feb 22, 1:21pm 1644193283

A lot of people aren't going to bother getting tested for some sniffles when a positive result means you and your household are locked up for 10-24 days.

by Gummy Bear Hero | 7th Feb 22, 2:23pm 1644196987

... honesty is being punished by up to 24 days self isolation ..

Why bother , when it's better we get infected , get over it , and get on with our lives ...

... will Jacinda , Chris or Ashley get it ... we want them out of our faces !

by Yvil | 7th Feb 22, 1:50pm 1644195036

Only 49'812 off the prediction… or another way to look at it, the scaremongering prediction of 50'000 cases by Waitangi day was 99.624% wrong

by HouseMouse | 7th Feb 22, 3:28pm 1644200883

It's a shocker isn't it.

We all know forecasting is a tricky business, but to be *this* wrong...? It really questions their credibility.

I think it's only likely to be explained by the idea that people are not getting tested to a small extent.

Something bigger is at play.

Have any of the modelers been asked to explain the massive difference between forecast and reality?

Obviously it's kind of a good thing that the numbers are much lower than the forecasts, but it raises big questions about their forecasting accuracy.

by muzled | 7th Feb 22, 4:15pm 1644203737

What percentage aren't getting tested?

75%? or is that too high a guess?

by Solve_it | 7th Feb 22, 9:32pm 1644222729

That's Sundays numbers. Sunday's are always down for vax and testing rates. Look to the numbers that come out on Wednesday for a better steer.

by Yvil | 7th Feb 22, 1:16pm 1644192992

I remember when most on this site blamed the foreigners for the house price rises before the Foreign Buyer Ban came into force. In 2021 foreigner sold more houses than they bought yet house prices rose by a record %.

The people blaming the foreigners were quite simply… wrong!

by Brock Landers | 7th Feb 22, 1:18pm 1644193121

... or the foreign buyer ban was ineffective.

by HouseMouse | 7th Feb 22, 3:28pm 1644200919

Possibly a bit of both.

by Wrong John | 7th Feb 22, 3:02pm 1644199363

A non stat.

by Eric2010 | 8th Feb 22, 6:32pm 1644298334

The true story is that those people who have work visa and was stranded overseas started selling their properties, which was purchased before the forein buyer restriction commenced. Thousans of people cannot come back to their home because of border restriction and they are also no eligible to apply the new 2021 resident visa, they just simply lost their hope and have no option but to do this. there will be more.

by K.W. | 10th Feb 22, 12:33am 1644406380

Considering NZ hands out residency visas like lollies, there is no shortage of foreign buyers being converted to "New Zealand" buyers. Labour just granted 165,000 residency visas this year alone.

Make the foreign buyer ban apply to all non-citizens, and lets see what happens. Although I imagine then the Govt would just hand out citizenship like lollies, so we cant win.