By Bernard Hickey
Prime Minister John Key has argued in Parliament that net buying of homes by foreigners may be as low as zero, citing research by BNZ Chief Economist Tony Alexander.
Key made the comments as Labour Leader David Cunliffe ramped up his questions about foreign buying of houses in Auckland, particularly those buying over the phone through auctions and those Chinese investors searching for New Zealand property on the internet.
Cunliffe's questions about foreign buying start around the 2 minute mark. He began by asking about the BNZ-REINZ survey of real estate agents conducted by Alexander, which Cunliffe said showed 2,750 homes nationally were sold in the year to February 2014 to non-resident offshore buyers, including 12% of all Auckland homes.
Key said in reply many of those offshore buyers may be New Zealanders or Australians.
"If you look at the numbers supplied by Tony Alexander, in terms of his monthly survey of real estate agents...I reckon he doesn't have much in the way of numbers...but if we go to them, he says 6.4% of dwellings sold by them in March this year were considered to be to people from offshore, but when you take into account those that were Australians or those that are legitimately moving to New Zealand, it comes down to 2% that are considered in that category," Key said.
"When you look at the sellers who were offshore, interestingly enough, he says the net sales and the net purchasers are about equal, so in other words the net number is zero. So we should quote the oracle of all this information, Tony Alexander, when he says the implication is there could be zero net transfers of New Zealand home ownership occurring to overseas investors," Key said.
Cunliffe then asked Key if he was concerned about recent statistics from real estate listings site Juwai showing New Zealand was one of the 10 most searched destinations by Chinese property investors.
Key said there may be many reasons why Chinese nationals were looking at New Zealand, including that it "was well governed under National."
Cunliffe then asked if Key agreed with the two thirds of people who said in a survey they favoured restrictions on "offshore speculators" buying property and whether he would support Labour's proposal for a Capital Gains Tax on rental property and second homes.
"Why is he standing by while young Kiwi first home buyers are outbid by foreign telephone bidders using cheap foreign money to buy up New Zealand houses, like for example, the more than a dozen overseas phone sales witnessed by Auckland real estate agent Adam Wang?," Cunliffe said.
Key responded that he would not support a capital gains tax on every small business and farmer in New Zealand and that there was already a capital gains tax on property speculators. He was referrring to the Inland Revenue Department's push to tax income from house sales by investors trading rather than holding houses.
Earlier Key had referred to how rising house prices from 1999 to 2008 under the then Labour Government had worsened home ownership rates.
"I know failure when I see it and it's a doubling of house prices and interest rates at 11%, and it's called a Labour Government," he said.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.