Immigration Minister Michael Woodhouse was on Q+A yesterday, talking about immigrant labour exploitation (my opinion on that is its good the Nats are finally taking notice but creating a new law is always their answer when its usually enforcement of existing law that’s the issue, and it would be concerning if the new law creates protections for one class of workers in excess of others) and about foreigners pushing up prices for houses and land. Woodhouse, purposely, conflated immigrants buying houses when they are coming here with non-residents buying houses that are purely rental investments/speculations on the NZ housing market.
No-one has a problem with people buying a house if they’re coming to live here.
There is a problem with people who don’t live here speculating on our housing market (using money they can borrow very cheaply in other countries) and, so, pricing Kiwis out of the market.
Now, National says ‘oh, only 4.5% of houses are being sold to non-residents, what’s it matter?’ Actually, it matters a lot. The supply of houses is inelastic. Add more demand and you force prices up disproportionately.
It doesn’t make sense to let your housing market be used as a profit-making business for foreigners, especially not when it prices your own people out of home ownership and fuels a housing boom that has wider economic ramifications (including higher international debt and a higher dollar).
That’s why other countries don’t let you buy houses there. Australia bans non-residents from buying existing residential properties – they have to add to the housing stock if they want a house in Australia. Why don’t we do the same?