Economic consultancy Infometrics is predicting that the number of new homes being built will increase by 39% over the next two years and and house prices could fall by 11% once the new supply kicks in.
Infometrics chief forecaster Gareth Kiernan is predicting new dwelling consents to hit 40,044 a year in the two years to June 2018, up from 28,387 in the 12 months to May this year.
Much of the increase is expected to occur in Auckland, where Kiernan is predicting consents to increase to about 14,000 new homes a year, compared to 9434 in the 12 months to May this year.
Kiernan said he expects new housing construction in Auckland to start ramping up considerably once Auckland Council's new Unitary Plan is finalised in the next few months, with much of the new dwelling stock expected to be higher density housing.
However such a big jump in construction will put pressure on the sector's resources, he warns.
"Such a sharp lift in building activity will not come without side effects, with intense pressures on construction sector resources fuelling increases to building costs," he said.
He predicts residential building cost inflation will average 5.2% a year over the three years to March 2019, well above the likely level of general inflation.
"These cost pressures are a necessary evil that will encourage the flow of more resources into the building sector," he said.
"But even with these additional incentives, we see a risk that activity will struggle to expand to the extent that we are predicting, which would further exacerbate cost pressures.
"With the undersupply of housing in Auckland possibly as large as 32,000 dwellings, we are not suggesting that the region's housing shortage will be rectified in the short term.
"However, if building activity hits the levels we are predicting, there could eventually be some softening to house prices in Auckland and regional property markets.
Infometrics is predicting house prices to drop 11% over the two years to September 2019 as the extra supply starts to kick in.
Kiernan doesn't believe proposed moves by the Reserve Bank to restrict new mortgage lending on residential investment properties to 60% of their valuation will have a lasting impact on housing affordability.
"There may be some short term dampening effects on the housing market from such a policy, but ultimately, lifting housing supply is the only way to get lasting improvements to home affordability, he said."
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86 Comments
XeLnaga
Using the flog your country, your flag and your kids future to China model I predict prices will be TRIPLE unaffordable by 2019. This correlates with the rachet model of asset price manipulation accepted as legitimate by central banks and governments worldwide.
After the great ponytail famine of 2018, Nick Smith will succeed Key and declare with breath as fresh as paint that National have conquered the housing challenge! The mad gainz are down to mere single digit percentages.
After all 200k a year rise is mere single digits if you can get the leaky buggers over two million.
The track record model also works pretty well. But hey, whatever generates site traffic...
I predict the following is wrong: "new homes being built will increase by 39% over the next two years", so on that basis, the "house prices could fall by 11%" is wrong.
Therefore, I also predict xelnaga is right.
I've entered the date in my calendar to see who ends up right. Will anyone else?
I see Ray White Real Estate now marketing our homes to China. Your assessment, given no rule change about foreign investment, is probably not rocket science.
http://www.stuff.co.nz/business/industries/82465472/ray-white-signs-dea…
Actually it is observable reality that as "housing units" are crammed in smaller, tighter and higher, the average price of them goes UP, not down. Hong Kong has 66,000 people per sq km and a median multiple of 16; Atlanta has 700 people per sq km and a median multiple of 2.9
These are the end points of an obvious correlation in the data.
I did not know your term "ratchet model of asset price manipulation" before, but it certainly is the correct term for the "anti sprawl, increased density" policy in urban planning.
Infometrics nice predictions of so many units of increased supply and exactly 11% price deflation (when it needs to be 60%+) is garbage in, garbage out. It is based on computer modelling that has had no demonstrated ability to actually explain urban land value differentials between cities, in real life. It is like doing rocket science without the force of gravity included. Economic land rent is LIKE a force of gravity, it sucks real income into a kind of black hole under conditions of quotas on land supply for a particular use. It could be done in land for food production too...
It took me a good few years of hard work to finally figure out that NZ is not really an agricultural economy, but a rentier economy pretending to be an agricultural economy. Very few understand that such a thing as economic land rent exists. They think it's the capital improvements, the houses and offices that go up in value with time, not the locational value. In our system it seems that wealth is capitalised into land value, or more exactly into the value of locational privilege via land title..
I see that it's because NZ is structured how it is, that land speculation and banking are the businesses to be in. There are aspects of this that escape me, although I'm sure they are hidden in plain sight. I've read a little of Michael Hudson and Fred Harrison. Who else do you recommend? I'm more interested in the mechanics from a private business perspective than a public policy one. That is, how to avoid doing something stupid and how to trim my sails to the prevailing winds. In short, how does it all really work.
By the way, I'm glad you are back. Very few have your vast knowledge of the subject.
Thanks for the comments, Roger. The problem with a lot of writers on "land rent", is that they have missed the coup-de-etat of the rentier class in the form of urban planning. It is NOT merely about "location" - if it was, it would hardly be morally or economically worth bothering about.
There are two types of land rent: differential and extractive. "Extractive" economic rent is basically people being forced to pay the maximum they can stand for something. Differential rent is merely the extra on top of a fair minimum value in a competitive market, that you pay for location.
The ability to convert land between uses outside the urban fringe is paramount. When you have this ability, the entire land rent curve for a city is "differentially" derived. It is derived from the value of rural land, plus a premium for the transport cost savings, plus local clustering and amenity value (nevertheless still realistically related to real incomes). The aggregate value of land in such a local economy will have a predictable relationship with aggregate incomes. NZ's cities did reflect this somewhat until around the 1990's. Median multiples of 3 in housing are evidence of this everywhere they exist. The housing is generally, over time, improving in quality and even getting larger in size, for the same real price, same as all consumer goods in a free market economy.
When you have no ex-fringe freedom to convert land between uses, the land values are derived "extractively" instead. Basically you have a bidding war for every attribute of land and housing, especially living space; and everything capitalises into land rent. Rising incomes; lower interest rates, subsidies, tax breaks, local amenity investments, rezoning for increased density, even a falling cost of living in other goods and services. Some of the best reading material is from Paul Cheshire and colleagues at the London School of Economics: among other things, they have for decades been tracking the divergence of UK urban land prices from the benchmark of US cities with no fringe growth constraints (which the UK imposed in 1947). This divergence was a factor of 100 to 320 by 1984; and is now a factor of 120 to 900.
No economists model of urban land markets even starts to try to incorporate the gravitational force of land rent that has this result, hence the real life outcomes are thrown out from forecasts just as surely as if rocket scientists left out the force of gravity. For a start, the responses in land rent very powerfully affect "who can afford to live at X location at all", and on top of this, they affect site owners incentives in the direction of "holding and not developing".
This is helpful:
http://blogs.lse.ac.uk/politicsandpolicy/why-arent-we-building-enough-h…
There is an obscure branch of economics called "monopolistic competition" which is extremely appropriate in urban land under regulations. The shallow assumption generally is that an urban property market has "free market competition" by virtue of the fact that there are thousands of different property owners "competing with each other", so we don't need to bother ourselves about total land supply, or ability to convert between uses. Massive damage has been done to resolving these issues globally, by qualified economists taking this stance.
It is a curious observation, but it seems that "extractive" economic rent in urban land is of an order of magnitude just as high, regardless of whether there is a single exploitative land owner, or any number. They certainly do not "compete with each other" to sell their property cheaper than each other.
A similar confusion exists with "deregulation" of some other markets - they are said to have been reformed to achieve "free market efficiencies", but the crucial factor that will determine if this is the case, is not the existence of more than one "supplier", it is 1) superabundance of potential supply and 2) freedom of entry to the market, by new suppliers tapping into the superabundant supply.
Free trade and global transport system efficiency has resulted in true free markets for most resources utilised in most consumer goods. That is, there is far more potential supply than needed; and there is considerable scope for new enterprises to tap into some part of that supply and compete with the existing suppliers.
Paul Cheshire, referred to in my earlier comment, wrote the following in a 1998 text book:
"...Housing supply parameters differ greatly among countries, depending of course on technology and materials availability, but mainly on the extent to which governments have permitted conversion of land from rural to urban uses…housing quality varies more than can be accounted for by income variation and house prices vary among countries from 3 to 15 times the annual incomes of urban residents..."
It is "rural land" (and other non-urban land) that represents superabundant supply, and the ability of anyone to build dwellings on it, represents the "freedom of entry to the market" that disciplines the incumbent owners of existing urban property. If you look at the trends from prior to automobility, and what happened to land rent in cities as automobile-based development opened up potential land supply at least tenfold, proving the change in the nature of urban land rent is a slam-dunk. Modern urban planning has merely reversed the trend back towards pre-automobility conditions. Another corollary to this is that there are plenty of developing countries that have never had an automobile-based growth stage like we did - they might have access to automobiles, but planning and outright corruption has sustained the "extractive rent" racket: and these countries, surprise, surprise, have never had the west's phenomenon of democratisation of ownership of homes, massive improvement in average housing conditions, and increase of per-person space; and the problem of half the population remaining stuck in illegal slums, is chronic and intractable. We do see, in UK cities, the manifestation of pressures building up "back towards" illegal, overcrowded "housing" - the authorities are constantly policing and clamping down on the renting out of garages, lofts, crawl spaces under stairs and floors, garden sheds, barns in the Green Belt, etc. In fact they fly spy planes around at night taking thermal imaging photographs that they use to detect "warm bodies in the wrong places". Plus any squatting or informal settlements springing up on the Green Belt are swiftly dealt with in draconian fashion. If not for this policing, London would turn into a third-world-slum city overnight.
Great post Phil.. many thks..
Roger... this is a great book
https://www.amazon.com/Secret-Life-Real-Estate-Banking/dp/0856832634/re…
Takes the work of Fred Harrison further... This enclosure of rent, has resulted in a real Estate cycle which is very distinct... ( what gives the cycle most of its amplitude is the levels of credit growth...debt )
The original economic equation was "Land + Capital + Labour"..
Modern economists have dismissed "Land" ..and just use Capital + Labour...
( Land being a Metaphor for ALL god given ... or Nature given.. natural resourses )
(Philbest alludes to this when saying modern economist don't account for..."the gravitational force of land rent".... I like his term .."extractive rent ". )
the Land aspect of the economic equation... is a big deal.
Until the system changes.... this is great knowledge to pass onto friends and family... ie... that there is a cycle and that , ... there are times when buying a house can be bad for ones' financial health.
cheers
Urban land and property values do go through downwards phases at the end of cycles; but the kind of racket that has been run in the UK for decades, and we are copying, results in a higher "trough" and a quicker resumption of inflation, at each cycle end. The trend is inexorably to higher and higher "economic rent" per unit of land.
Infometrics is predicting house prices to drop 11% over the two years to September 2019 as the extra supply starts to kick in.
So from Sept 2017? And between now and Sept 2017? Most likely way more increases, esp outside of auckland as mortgage rates start coming in with a 3 handle (cnbc speak 3.xx )
Lies, damn lies and statistics Simon.
What they mean is the supply will be mainly smaller apartments which should lower the average price across the board, but the price of these apartments (as with other housing) will still be increasing on $m2 basis.
It's a 'claytons' reduction.
The next stage will be 'shoe box in middle of road,' on which the same claim of falling house prices could be made.
The Auckland housing market is largely a ponzi-scheme, based on the concept that prices will keep rising forever. The city cant handle higher rentals without losing workers, with even middle class professions such as teachers being driven from the city. When prices stop going up, all those people who are having to subsidise their mortgage payments will exit the investment market and the prices will decline. The 11% prediction is probably about right - followed by a sustained period of nil price growth. I cant see a fall about that level, there is a lot of pent-up demand. However, I am also aware that everyone predicts a 'soft landing' before a pricing collapse.
The Auckland housing market is largely a ponzi-scheme, therefore will continue to go up until it bursts.
the RBNZ is trying to cool it but it will only work short term like last time.
the only way to deflate it is in governemnt hands but when you hear them all talk (no matter which side) they dont want house prices to drop so have no will to make hard decisions.
it will correct sooner or later, those that brought years ago or are not leveraged will be fine, the rest will get hurt in some fashion
Immigration isn't a factor as proved by the limited rental increases. And overseas speculation, which is significantly overstated, will leave with price declines. The fundamental truth is: we can build a modern 150 sqm house with double glazing for $200,000. When the land supply is not restricted then supply increases.
All these people predicting on going price increases from immigration should ask themselves - have we priced cars out of the market? - are younger generations complaining that all the baby boomers own all the cars and they can't get their first car? - NO the reason is because supply can adjust to demand. Less than 1% of New Zealand is urbanised - there is no shortage of land we just have massive booms and busts because it takes longer for supply to match demand.
And where do you think they are going to build these mythical 200K houses? And yes we have lots of land but i'm not sure an hour commute or 4K p/a in transport costs or the ugliness of urban sprawl are worth it.
The build more brigade simply ignore the future burden
Los Angeles covers 5 times as much land area per person as London, yet the average commute time is 28 minutes in Los Angeles and 39 minutes in London.
Everyone who voices the stupid opinion that trips just get longer and longer as a city expands, needs to be made to write 1000 lines; "jobs and amenities disperse at the same rate or faster than the city footprint expands". This is NOT rocket science!
PhilBest,
Really? I hope you are not in the rocket business. Are you saying that there is,or very shortly will be, sufficient work in Pokeno for example, to employ all the Aucklanders who have recently moved there, with more to come? If so, what evidence do you have to back it up?
Being a kindly person, I would only make you write 100 lines; In future, I will have evidence to back up my statements.
Monster commute times for increasing numbers of people, and higher average commute times for a city, are a RESULT of people being "priced out" of locations pretty much according to the location's centrality. The higher the prices go, the further away people end up living - like in Pokeno. IF the city had been freely allowed to spread, and the land prices kept flat, virtually everyone is able to afford to live INSIDE the urban fringe, and even in the MOST efficient locations well inside it, relating to their job and other needs.
In a chronically unaffordable city like London, on the other hand, contrary to the FLAT LIE that density = shorter commuting on average, here is Fairfax's Rob Stock just two days ago on his OE experience in London:
"...Here was my commute. Rise before dawn. Cycle 3km to Waterbeach village station. 9km train ride to Cambridge. Change for the 90km trip to King's Cross Station. Tube and foot to office on Picadilly Circus. The trip took anywhere from an hour-and-a-half to two-and-a-bit hours..."
Oh, but density will reduce commutes and save the planet! Ask the people commuting from Pokeno to their Manukau job, why they don't live nearer Manukau, or even right in it? Honestly, this issue is infested with sneering fools.
Data in Table 8 of this paper:
http://archive.fcpp.org/files/1/PS135_Transit_MY15F3.pdf
Or this article:
http://news.bbc.co.uk/2/hi/uk_news/3085647.stm
Or this:
http://economix.blogs.nytimes.com/2011/10/14/world-of-commuters/?_r=0
Others can put up or shut up - provide an authoritative source that justifies your sneering.
Check out any number of modular house sites and the price of new houses outside Auckland. These houses aren't 'executive residences' but they are also better insulated, have better seismic performance and lower maintenance than most Ponsonby bungalows. I don't doubt that construction costs have gone up significantly compared to inflation, possibly as a result of health safety requirements. I don't doubt insurance companies will collect premiums for $400,000 properties.
Err you mean basically all the illegal immigrants coming into Europe without a cent and all trying to get into Germany for the free handouts ? Not exactly like the multi millionaire Asians coming here and buying up the property to launder all their cash. Supply and demand people, it applies to everything. Yes we can build more houses BUT they are getting further and further away from the CBD so are less and less desirable. We would need massive infrastructure investment and a very fast rail link to the CBD to make it attractive and we cannot even put on a decent bus service from the North Shore RIGHT NOW so its a joke to even talk about it happeneing.
To do a proper job of predicting the future you would probably need a spreadsheet or some other program. You would first need to list all the factors which would or may have a bearing on the topic. You would then have to put a number to the current value of these things and to make a prediction of what may happen to these factors in future years. ie Individual curves. You would the need to crunch the numbers by using a formulae. The formulae would of course assign a weighting to the all the curves (factors) and would have a mathematical equation which could be linear, quadratic, a combination.
To test the process, you could go back in time and check whether the process worked for historical data or not. Tweak it. Play with it. Throw it out. Build a new one..........
However.....!!!!! The whole thing needs a disclaimer: Past performance is no indication of future performance. So it all may be a crock of sh!t.
And indeed, there will be factors which the creator of this thing will not have thought about/ predicted. eg Earthquakes, tsunamis, flooding, an even more useless mayor being appointed, war, terrorism in NZ etc. This list would be very long. So there would have to be a rider that all these things have been excluded.
And at the end it would probably be prudent to say that this is just my own opinion.
...I'm sorry, I can't tell if you are being serious.
"you would probably need a spreadsheet or some other program"
"You would the need to crunch the numbers by using a formulae."
"And at the end it would probably be prudent to say that this is just my own opinion."
I appreciate the sarcasm, if that was the intention.
Infometric expects but when, after 3 years, if and when the supply kicks in. That means based on 15% to 20% annual increase house price in Auckland would be about 1.5 million average and if it fall by 11% will be than also about 1.35 milion so HOW DOES IT HELP. If one million is expensive today will 1.35million after 3 years, will it be cheap ( if they say 2 years assume 3 years if lucky).
Again it highlights National party government failure in trying to adddress the Demand as a result housing crisis.
Let the experts decide now if only supply that national is hiding behind will help or it has to be followed by control on Demand also.
Amam, I think all experts and opposition should expose the inaction of government to help control demand and should be highlighted at all platform so that national should not feel that they have got away with their agenda of defending the overseas friends at the cost of NZ people
...ahhh, am I the only one that sees an issue with this logic?
Current average house price in Auckland - we'll say $1mil - despite all the limitations of such a metric.
So, you're saying that the average has to increase by $500k in the next year, to meet your $1.35mil mark in Sep 2019..
I'll let you in on a secret - that is not going to happen.
If Infometric's forecasts are correct, there is no way that the market is going to be as hot as it has been in the previous 2 years, purely because the return won't be there to fuel it. It's more likely that we are going to see a plateau phase from here on in, until the correction - dependent of course on the unitary plan proposal.
Still, Infometric expectation that will fall only when supply will kick in so whatever the price now in 2 years time if it continues the way it is now without the government doing anything to control demand than the median will atleast be 1.25 Million and than if it falls to 1.1 million, still expensive.
Again all this are just assumption. Reality is government is not doing anything to curb speculation and should be exposed for its inaction.
Has anyone ever heard about government talking about controlling Demand. Can understand that demand like any other measures cannot be totally controlled but even the desire to control is missing from the government to protect..............
Labour is talking about Supply as well as DEMAND, whether it has any effect or not only time will tell but atleast they are accepting that Demand too is an important factor and has be addressed.
http://www.labour.org.nz/housing
To Take action action, one has to first admit but if in denial, how will the national act.
Easy to figure it out.
1. Immigrants usually dont buy a lot of houses.
2. Student on students visas buy a lot of houses including commercial properties.
3. Dirty money be laundered from around the world including political figures through front companies and blind trusts.
I would say at least 50% of property in auckland is being purchased in this manner.
30 to 40% is being purchased by so called investors via bank created credit/debt.
You got it, it's one big casino in housing waiting on huge capital gains to occur.
The inflection point is near ROI 2% with the RSB dealing a huge blow to the capital gain side one can only see a crash not to far off certainly by late 2016 to late 2017.
Once the LVR rule hits home you may find these so called property investors cannot sell therefore cannot buy.
Is this a RBNZ check mate on so called property investors wait for a month or two and witness the decline in sales then a decline in values then a decline in interest in property investment the a crash in prices as the property investor wakes up to zero returns and losts of bills to pay not to mention tenant problems.
RBNZ has no concern about return on property investment the market has bid prices so high there is no nett ROI on property most are losing money and relying on capital gain.
RSBN has hit this one to wait for capital gains to start slipping away as the new reality sinks in the cranumn of the property investors and the like.
The council will be enforced by govt to build up not out as building up is faster and quicker then individual shack building.
Expect 40/50 apartments to be built over the next 2 years.
There is a very good likely hood the govt will have the situation well under control by 2018.
Then the major decline may set in as the market will be over supplied.
I agree.AKL is going through a process from being one of the lowest density Cities in the world to becoming like the rest. It especially needs higher density near the city centre due to the poor transport network. Investors have been buying up the properties where subdivision will occur.
Relative to most cities in Asia is has lots going for it. I doubt the immigration numbers are going to fall to 12,000 in 2019 as the Government expects.
Building costs look to be around $2200 to $2400 per sqm so it would cost around $500K just to build a house similar to the one I have at 210sqm. Developers are asking $350K (400sqm) to $500K (1000sqm) for sections in Pukekohe. We are on 800sqm. So for me to replace my property would cost over $800K (assuming $400K for the section). Why would anyone build only to lose their equity straight away?
plenty more overseas buyers on the way
http://www.stuff.co.nz/business/industries/82465472/ray-white-signs-dea…
@Too Clever... You have hit the nail here. Apartment living can be fantastic et all but we live within the Pacific Ring of Fire. I will not be betting on seismic resistance for a building/s while we still struggle with leaky homes. I'd rather move away than up personally.
Don't worry about any falls there are plenty on new foreign buyers to be found.
39% at last count if you include non-residents, temp visa workers and foreign students. This is not high enough so RayWhite is looking for more in China. Great News !
Ray White links up with China to sell more properties
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1168...
In the same week we find out we have the lowest tax of 26 countries surveyed on a house purchase. ZERO TAX actually
Economist frets on property purchase tax ranking
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=1168...
It is about time we applied a stamp duty these foreign buyers (39%) to cover some of the infrastructure spend Auckland so badly needs. 15% stamp duty would be a good starting point and we can increase it if it proves ineffective. In the meantime will we rake in millions which can be used to help pay for new homes for the homeless, rail, a new harbour crossing, govt schemes to assist FHBs.
JOHN KEY your turn mate. You pointed your finger at the Reserve Bank they acted and now it is your turn to act. Talk is cheap.
I'd suggest a look at the Productivity Commish' recent Note on Complexity theory in relation to Urban Planning. http://www.productivity.govt.nz/sites/default/files/What%20can%20comple…
The money shot:
Moroni (2014, p. 26) explicitly argues against a “participative, communicative, collaborative process” as
a way of solving the problem he identifies with planning in complex systems:
… if explanations of detail and specific predictions are intrinsically impossible in the case of a
complex system like a city, any participative, communicative, collaborative process – no matter
how extensive, transparent and shared it may be – cannot solve the root problem
Most of the common taters appear to my old and cynical eyes, to be arguing about 'explanations of detail and specific predictions'.
And are thereby irrelevant, for these cannot, according to this one strain of complexity theory, be determined. Complexity, the author notes, is a emergent property: one that cannot be predicted from simple combinations of inputs or contexts.
But as Leonard Cohen sings (Tower of Song)
Now you can say that I've grown bitter, but of this you may be sure
The rich have got their channels in the bedrooms of the poor
And there's a mighty judgment coming, but I may be wrong
You see, you hear these funny voices
In the Tower of Song
Cool link there Waymad. Pity it is in extra double wordy intrinsically verbose academic very, very, long word speech designed primarily to make the users of such speech appear cleverer than they are. I guess you need to really understand what you are talking about in order to be able to put it in plain English in less than 30 million words.
After Australia even Canada has announced tax for foreigners buying property in Canada.
http://www.stuff.co.nz/business/82489325/canada-tax-targets-foreign-hou…
WILL JOHN KEY EVER ACCEPT AND ACT.
Time has come for all, specially experts and media to highlight and expose JK.
HE TOO WILL HAVE TO ACT THAN WHY NOT NOW THAN LATTER. WHAT IS HE WAITING FOR.
Waiting till we've done away with all the predators, oh sorry, just a few of them, rats, stoats and possums, well, I think possums, though I've not really thought of them as being overly predatory.
Housing crisis? What housing crisis, look over there, dead predators.
Good move....
"British Columbia’s (BC) Premier, Christy Clark, has unveiled a new proposal to levy an additional 15% property transfer tax on foreign buyers in a bid to rein-in runaway housing costs in Vancouver"
http://www.macrobusiness.com.au/2016/07/vancouver-installs-15-foreign-b…
http://news.nationalpost.com/news/canada/meet-the-mysterious-tycoon-at-…
The real estate industry had commissions of 500m last quarter. That's 2bn a year. Plenty of money to throw into NZ main stream media advertising etc.. Enough leverage to ensure the right message is delivered.
Canada, uk and Australia all have stamp duties for foreign buyers and /or investors yet still no headlines demanding this in NZ. Go to the comments section and plenty of chat.
Surprisingly even media is silent. In Canada overseas buyer issue was highlighted day in and day out by media based on facts and even PM accepted unlike ours who is in denial.
Vested interest or too much in awe of government or may be, we have no non resident buyer and is a myth
Again Non-Resident is a red hearing
Focus on foreign buyers which includes three groups.
1. Non Residents
2. Temp Visa Workers
3. Foreign Students
Group 1 accounts for 4% of NZ purchases
Group 2 & 3 accounts for 35%
Together they account for 39% of purchasers in NZ
In Australia all those in group 1,2 & 3 all pay stamp duty.
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