Photo: Happy Relm
New Zealand has seen property prices repeatedly reach record highs in recent years, as demand exceeds supply in varying markets. Some have speculated that interest from international investors could be a contributing factor to the booming values.
New Zealand is not the first country to express such concerns. Indeed, London’s property market is renowned as a popular “safe haven” for overseas investors seeking strong capital growth, with property values accelerating far ahead of the rest of the UK. In Australia, meanwhile, measures are being introduced to restrict overseas investment amid fears that foreign buyers are fuelling price rises.
Upon hearing that Land Information New Zealand officials have already begun work on a potential register, the country’s Labour Party hailed it as a “welcome surprise”.
“Kiwis deserve to know who is buying New Zealand’s land and houses, and where they are from. There are a number of unhelpful rumours and innuendos about the level and scale of foreign ownership and its impact on the housing and rural markets,” said Labour’s Land Information spokesperson Stuart Nash.
“We now need to quantify the scale of such activity.”
He added that the data would likely show “a significant number of foreign speculators are buying New Zealand property for its tax benefits”.
“There is virtually no other investment in the developed world where investors can get a tax-free return,” he added. “This is how investment in New Zealand real estate is marketed into China by some companies. It just doesn’t seem right.”
Now, though, a Chinese property portal has joined the calls for a buyer register.
Simon Henry. Co-CEO of Juwai.com, which lists over 8,000 New Zealand properties, told OPP Connect that such a measure would only highlight the positive effect buyers are having upon the market.
“It could provide clarity about a situation that is currently highly charged,” he commented. “We think it will show that international buyers are a vital part of the market, and not a harmful one.”
“For those who want to immigrate and have the appropriate skills, New Zealand’s immigration system seems to work well. The government reports that 44,008 people were approved for residence last financial year, up 13 per cent from a year earlier. China with 17% was the number one source country, followed by India at 14 per cent and the UK at 12 per cent,” he added.
“Not every Chinese buyer wants to immigrate. A Bank of New Zealand report in March concluded that about 41 per cent of Chinese buyers intend to live in New Zealand.”
Henry also noted that Chinese investors are different from, for example, Japanese investors, with most buyers tending to be individuals or families who are looking for a long-term legacy rather than a short-term speculative profit.