This has been Labour policy for a while, and now that Labour is in power they are getting on with the job of preventing foreigners from buying residential property. From Radio New Zealand:
The new government says the plan to ban foreigners from being able to buy existing houses in New Zealand has to happen now, before the TPP is signed off.
But the opposition said Labour’s housing ban lacks detail.
Prime Minister Jacinda Ardern yesterday announced Labour would make changes to the Overseas Investment Act to classify residential housing as “sensitive”.
It stops non-residents and non-citizens from being able to purchase existing houses, although they can still buy land to build on. Australians would be exempt.
Ms Ardern told media at her first post-cabinet news conference yesterday that both New Zealand First and the Greens backed the law change.
The plan to ban foreigners from buying existing home in New Zealand has been dismissed by real estate agents as unlikely to change much.
Trade Minister David Parker told Morning Report today that the new government did not expect the move to have a huge impact on the current housing market.
He said the issue was more of a problem two years ago when a housing price bubble around the world saw a large flow of capital into the NZ market, but the foreign buyer ban had to happen now.
“If you don’t do it now, you can never do it. Because if TPP is entered into, New Zealand will have lost the policy space to protect the New Zealand housing market for New Zealanders.”
The change will be effected by a change to the definition of “sensitive land” in the Overseas Investment Act 2005. The change is an easy one to make. It does not of itself stop any sale from occurring, because an application to the OIO I presume will still be possible, but I can’t imagine anyone going to the bother of applying to buy a residential property.
The talk about TPP11 is a worry. If it is just a trade deal without investor state dispute settlement procedures or changes to intellectual property law then perhaps it could be considered. But if it is similar to TPP12 then things are going to get interesting …