Despite the relatively small proportion of overseas buyers, figures suggest restricting overseas demand could "significantly impact" NZ's property market
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As little as 3% of all home purchases were made by non-resident New Zealanders in the year ending March 2018, according to new statistics released by ASB.
However, the bank’s report into overseas influences on New Zealand’s property market showed that 11% - 21% of reported purchases involved a non-NZ citizen, with the proportion being considerably higher for certain areas such as Auckland and Queenstown.
Analysis of recent purchases also revealed some segmentation in the regional residential market. Areas with high rates of acquisitions by NZ citizens had comparatively fewer purchases from overseas buyers; however, areas with higher rates of NZ resident (but not citizen) acquisitions also tended to have more purchases by corporates and non-residents.
According to the report, the presence of more potential buyers, regardless of citizenship, inevitably adds to demand in areas with a limited supply of homes. New Zealanders who have managed to purchase properties in this area are therefore likely to pay considerably more to do so.
Nonetheless, increased overseas activity has also likely led to more residential construction than might have occurred in its absence. The statistics suggest that restricting net immigration and overseas demand could therefore have a “significant impact” on the local property market.
“Policymakers need to strike the right balance between promoting measures to facilitate dwelling construction and ensuring that NZ citizens do not get priced out of their domestic housing market,” the report stated.
“While there are gaps and limitations with this data, it represents a significant step forward, helping shed more light on what has typically been a grey area in the analysis of the New Zealand economy.”
