BNZ-REINZ Residential Market Survey, which attempted to quantify foreign house buying, has been canned

BNZ-REINZ Residential Market Survey, which attempted to quantify foreign house buying, has been canned

By David Hargreaves

The monthly BNZ-REINZ Residential Market Survey has been canned.

Interest.co.nz found out the survey had been cancelled only when contacting BNZ chief economist Tony Alexander to inquire when this month's survey might be out.

He confirmed that the survey was no longer running and said the main reason it had been ended was because the response rate from real estate agents in regional markets was not high enough. Another smaller motivating factor was the information on first home buyers being produced by data and analytics company CoreLogic, which Alexander said was more detailed information than his survey had been getting.

The BNZ-REINZ survey has had a high profile recently in the media because of its periodic attempts to quantify the extent of offshore buying of New Zealand houses. The survey sought this information twice last year and again in the March survey, which it transpires will be the final one. There was no indication given in the March survey results that it would be the final one.

The issue of foreign buying of New Zealand houses has become an extremely contentious one, particularly in Auckland, where there are rampant anecdotal tales of widespread buying by offshore-based investors. The opposition political parties, including Labour, all want to see offshore-based buyers banned from buying in New Zealand. Australia bans overseas based people from buying existing homes, but they can buy new ones.

Little research has been conducted in this country as to the actual, rather than simply anecdotal, level of buying by offshore-based buyers. The BNZ-REINZ Survey was one of the few attempts to quantify the issue.

The March survey results, which showed only relatively modest offshore-based buying, attracted a good deal of media and political attention. In Parliament recently the Prime Minister John Key quoted the survey results and argued that the net buying of New Zealand homes by offshore-based buyers may actually be zero.

Asked whether the media attention given to the survey had been a contributing factor in deciding to cancel the survey in future, Alexander said it "certainly wasn’t the deciding factor for me in cancelling the survey".

"I was only going to be doing the foreigner survey once a year anyway," he said.

“I never felt any great media hassle, as it were, from doing it.

"I never got any pressure from within the bank or anything to do anything regarding it," he said.

"So in the end it really just came down to was it achieving my original purpose of getting insights into the regional markets - because the complaint I get when I travel around the country from people is 'all I ever read about is Auckland housing' and now Christchurch as well.

"So, I always hoped to be able to get something more there, so that was the overwhelming driving force and I felt I was actively contributing something positive, I guess, to the economy through the foreigner survey activity and it would have been good to continue that on  an annual basis, but that’s simply not possible with canning the survey as I designed it.

"...At some point I just sat back and realised I just wasn’t getting a response rate to give an insight into the regional economies. We’re all talking endlessly about Auckland and I had hoped to be able to add something a bit more on the other areas but, nah, the response rate was not high enough to give us a good degree of confidence in those other regions so, yeah, canned it, move on to other things."

The survey has been running since April 2011 with agents around the country voluntarily responding to it and answering such questions as whether they are seeing more people through open homes, whether they are seeing more first-time buyers and is it a buyers or sellers market.

The numbers of responses have tended to vary greatly from month to month. The highest number of responses was 742 in July 2011, while the 587 agents that responded in December 2013 was the most responding since October 2011. The March survey response was considerably lower, at 373, but in line with numbers responding in the same month in both 2012 and 2013.

"The reason I set this up in the first place was to get good information on regional residential real estate markets and we haven’t been able to get that because the response rate simply hasn’t been high enough in the bulk of the regions," Alexander said.

"While we could continue it and keep giving monthly information on the likes of Auckland and Christchurch, there’s already a lot of information out there on those markets, especially on the Auckland market."

Alexander remains convinced, however, that there is a need for more research on foreign buying.

"...We actually need a proper survey and a proper investigation into that level of foreigner activity in the New Zealand market and how it is changing. A survey as I’ve got can only go so far and more work is needed," he said.

"What’s really needed is a more detailed, I guess, academic summary/investigation into the whole area. I don’t think any further can be added beyond what I’ve already been able to do with that survey to the foreign buyer issue."

Alexander said a "starting point" in terms of gathering more detailed information on house buying would be Australia.

"In Australia for instance the banks obviously report to the Reserve Bank of Australia their lending for investment purposes versus residential purposes and so they release details on that on a monthly basis but we don’t have that in New Zealand.

"Now maybe that data already exists in New Zealand and it’s up to the Reserve Bank to choose whether to release it or not.  

"But A/ you would have a look at how they do it in Australia and B/ also the way they enforce their regime in Australia on foreign buying of properties – buying new places, buying existing places.

"Obviously there is some step involved there in the sales process where these people are identified. But where it is reported to I don’t know, because the only information I’m aware of over there is the NAB [BNZ's parent bank] quarterly residential property survey where they come up with some numbers.

"But outside of that there has to be some determining of 'you can’t sell this property to this person it is an existing property and they are a foreigner'. Someone’s identified that somewhere in the process, so my starting point would simply be whatever they are doing in Australia and then look to modify it for the New Zealand conditions," Alexander said.

"...I think if somebody was to take a stab at a more accurate survey or measurement of offshore buying it would be positive, because the angle I’ve been coming from has been that the level of foreign buying at the moment I think is relatively low and I don’t believe is a driver of house prices outside of some specific school zone areas in Auckland, but further down the track I think the numbers will grow.

“New Zealand is part of the international financing-residential property community, we have these large emerging economies with families wanting to get investments outside of their countries – China principally – and if this is our xenophobic reaction now when the numbers are low, further down the track – five, 10, 15 years when the numbers are much, much higher – my concern is that there’s a risk that this reaction will have implications for our trade and broader investment relationships with those other countries," Alexander said.

"So, for me it is a matter of recognising that these numbers will grow over time and then you have a legislative framework in place to I guess, recognise that." 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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24 Comments

Here's my survey I conducted after arriving back from the long weekend to a pile of Estate Agents cards left after the weekends open homes.  10 Chinese agents to one New Zealand card.  Which talies with the number of agent enquires I have been rung with.  Mr Key I hope you are reading this.

By "Chinese agents" I assume you meanNew Zealand citizens with chinese sounding names? Or did their cards list their nationalities as Chinese?

I came across a Real Estate agent while back.  Her surname is Tong, she has blue eyes, brown hair and none of those asian features.
Lies, damned lies, and statistics...

You should know by now CM, that no REA worth their salt would have a business card without their smiling mug plastered all over it, ergo, I'm sure hair colour, eye colour and facial features of note could easily be determined without looking at a surname ;)
 
You only need to look at the "Barfoot's top 25" each year to see that 19 of the top 25 are Chinese. Helps with the lion's share of clientele when you can speak their lingo :)

Don't let that fact that they are (New Zealander) chinese from stopping you making inquiry if/when you need to buy or sell a house.  Unless you want to make Aotearoa - The land of the long white crowd..

Oh I'm sure!, I don't doubt that all agents deal with all sorts of clients (of all races).
 
But if you're a foreign investor, or a fresh-off-the-plane import looking to buy yourself a NZ Visa by "investing" a couple of million hot cash in the NZ property market, who are you likely to talk to? One you can converse with in your native tongue, or one you have to communicate with using a language you're pretty unfamiliar with.
 
 

Based on B&T's top 25 you should probably make an effort to deal with the "chinese" agents. They appear to be the best performers. 

Why concentrate on just sales  to Chinese foreign buyers? British, American, Austrailan etc are also significant purchasers and equally deprive Kiwis of owning their own home.
I am totally against sales to foreign buyers, but singling out one nationality is racist and rude.

Agree. How much did Aussie landlords distort the property markets around small town New Zealand in the last 10 years. Pumped them up beyond the local incomes. Though a few got suckered in the Auckland apartment market off the plans. I don't think CER confers any special rights with regard to property investment? Aussies seem to play by their own rules when it comes to us anyway

Perhaps the BNZ needs to keep on the right side of the imported equation, not Interest.co.nz or its readers.
What do they really care about Kiwis.
So for a limited period, they give up their monthly RMS, not PMS......Positive Monthly Stats as we cannot upset the Milk Float.
Cannot state the obvious can he, as he might upset his present customers, before  upsetting his future customers, who who will be delighted to chat with, if only they talked the same language.
BNZ probably need the money, after all.!?...So they are going after the biggest Market of all.
Then they will be able to take on bigger investors, so they can lend to even bigger ones and so it snowballs....And the Commission would be exponential for the BNZ, so-called.
And
One suggestion from me is for Gen XY to vote with their feet and go to a real Kiwi Bank, not a Chinese Wanna be one, whose aim is clear from what Tony said.
If it is xenophobic to have a go at A Chinese element , bailing out of China, maybe an Aussie wanna be Bank, here in New Zealand, with big ideas might be OK.
We bailed em out once....maybe BNZ has a short memory....that is why they are going off Kiwis and going long on Chinese.
Never trust a Banker with an agenda, I say. Especially when their lips move.
 
 

Not Aussie diggers this time... but you can see why others may wish to emigrate. Every picture tells a story.
 
http://www.theatlanticcities.com/arts-and-lifestyle/2014/04/china-being-...

This smells a bit funny.
So the BNZ decide to cancel a survey that generates very useful PR and gushing coverage of a booming property market (the Herald especially) which in turn drives buyers into their arms in a state of frenzy and fear of missing out on rising prices. 
 
My strong inclination is that it is due to the fact that the agents who did report back to Tony painted a picture that no-one in BNZ wants to see.
 
I could imagine the comments:
 
"Tony mate, it's slowed right down. I'll be struggling with me beemer payments if it keeps going at this rate"
"Even the bloody Asians have gone to ground. Gone with my dreams of that bach in Waiheke...sniff" etc
 
Tony says "...At some point I just sat back and realised I just wasn’t getting a response rate to give an insight into the regional economies. We’re all talking endlessly about Auckland and I had hoped to be able to add something a bit more on the other areas but, nah, the response rate was not high enough to give us a good degree of confidence in those other regions so, yeah, canned it, move on to other things."
 
I think the survey was never really credible in a quantitative way but it was quite a good read in terms of qualitative feedback. The raw comments painted a picture that you don't get from stats. 
 
Excuses smell like cow poop to me... Free the April comments!!

Nailed it. It's all slowed down, Tony doesn't want to admit it.

I think it makes perfect sense to collect data on who owns NZ's residential properties.
 
Three tick boxes such as  "NZ passport holder", "NZ resident", "Neither" will do the trick.
 
Keep mentioning Chinese with a tone of blame does not help to solve any problem. 
 
It only hurts the feeling of ppl who are Chinese by ethnicity but NZ passport holder or resident. I personally find it insulting.  It seems as if Australians or Brits had some privilege that made them exempt from any of blame?  

I think in the Auckland market, the number of auctions selling to people who don't seem to speak much (if any) English is much greater than those selling to people with Brit or Aussie accents. Not that anyone cares where anyone's from, more that we'd like to see kiwi residents/citizens getting the first (only) bite of the sausage when it comes to a roof over their heads.

There are plenty of pommy agents selling houses to new incoming poms, (especially in the boring white only areas that they love, such as the North Shore)
English and Chinese are both abandoning their ruined countries - why blame the ones who look different?
SK|
 

That BNZ survey was totally unreliable - surveying real estate salespeople, now do you really think all of the Chinese real estate salespeople are going to answer that survey in a way that would make it look like the majority of their clients were offshore based investors? Of course not - much better idea to answer the survey and say they are dealing with Australians or Poms and distort the true picture so the pressure stays off the Chinese sector.

ban all foreign investment in residential housing and massively reduce immigration - we dont need either.

How did you end up in Aotearoa in the first place?

Really
 
I don't believe you Tony
 
You've either been bought off, warned off, or the REINZ has leant on its members not to respond to your questionaires
 
I'm going for the last option
400 real estate agents don't all act independently and all (suddenly and simultaneously) arrive at the same individual conclusion not to respond without coercion.

Agree with TOG - Tony is obviously blessed with some intelligence and has probably realised that wasting his busy time with a group that is lower than whale manure is not going to generate any realistic truths so better to move on.
Government needs to step in here but they won't.
Kiwis so dumb lah!

Probably got labelled a racist as well for even suggesting that there may be an issue with foreign ownership of NZ housing stock.
Yep, Kiwis are super dumb lah, and it seems no-one has the backbone to do anything about it. Is that the sound of a herd of sheep bleating? 
Seems theres too many people looking out for their own interests. Who's looking after your interests NZ?  
A banker! Surprised he hasn't tried to sell the NZ people, as well as all the assets incuding the land and roof over your head. Or is that the next step in privatization of this country? After all, what else is left.

This is classic

 Putins been onto 'im