Statistics New Zealand is reporting that the percentage of residential properties sold to overseas buyers plunged in the March quarter - the first full quarter following the taking effect of the foreign buyer ban.
Home transfers to people who didn’t hold New Zealand citizenship or a resident visa fell by 81% in the March 2019 quarter compared with the same quarter a year ago, Stats NZ said on Thursday.
There were 204 home transfers to people who didn’t hold NZ citizenship or a resident visa in the March 2019 quarter, down from 1,083 in the March 2018 quarter. Total home transfers fell 3.5% over the same period.
“Overseas people acquired just 0.6% of homes transferred in the first quarter of 2019, reflecting law changes in late 2018 that introduced restrictions for overseas buyers,” property statistics manager Melissa McKenzie said.
“Despite the large fall in the number of transfers to overseas buyers this quarter, it’s unlikely to ever be zero, due to exemptions for some overseas buyers,” Ms McKenzie said.
The share of home transfers to overseas people peaked at 3.3% in the March 2018 quarter when the law changes were being discussed.”
The new legislation fully came into effect on October 22 last year - so, this is the first quarter to capture its full effects.
In Auckland, on a monthly basis, the share of homes transferred to no NZ citizens or resident visa holders varied from a high of 7.8% in March 2018, down to 1.1% in March 2019. On a quarterly basis, the number of homes transferred to that group went from 678 in the March 2018 quarter to 111 in the March 2019 quarter.
A detailed look at the latest statistics within Auckland shows the extent to which foreign buying has dried up.
In the Waitemata area, which takes in Central Auckland, just 3.2% of transfers (21 by number) were for foreign buyers in the March quarter. That's down from 13.7% (159 by number) in the December quarter.
If you go back to the June quarter last year, there were 321 transfers in the area to foreign buyers, which was 22.2% of the total.
“In both Auckland and New Zealand as a whole, the fall in overseas home buyers this quarter coincided with about an 80% drop in home transfers to Chinese tax residents,” McKenzie said.
Note: the statistics probably only paint a partial picture of overseas buyer activity in this country because they only include data on properties purchased directly by individuals.
The statistics do not include purchases made by overseas persons through a corporate entity such as a company, and probably do not capture most of the purchases made by overseas persons through a trust.
Stats NZ gave the following breakdown of the latest figures:
In the March 2019 quarter, of all home transfers:
- 82% were to at least one NZ citizen
- 10% were to corporate entities only (which could have NZ or overseas owners)
- 7.5% were to at least one NZ-resident-visa holder (someone who can live and work in New Zealand for as long as they like)
- 0.6% were to no NZ citizens or resident visa holders.