Land sales to foreign buyers are booming in New Zealand, with 465,863 hectares bought in 2016, an almost sixfold increase on the year before. That is the equivalent to 3.2% of farmland in a country of 4.7 million people.
Despite this apparent boom, official statistics show that of the 48,603 property transfers registered by the government in the three months to June, just 3% were buyers with an overseas tax residency.
The bulk of those buyers were Chinese mainlanders, followed by Australians. Tax residents of the UK, US and Hong Kong were also among the biggest buyers of property.
Domestic buyers feel they are losing out. Only a quarter of adults in New Zealand own their own home, compared with half in 1991. Soaring house prices have put home ownership out of reach for many. Hundreds of families in Auckland were found last year to be living in cars, garages and even a shipping container.
According to research from property agents Knight Frank, New Zealand was the 10th fastest growing country in the world in terms of house prices. Prices increased by 10.4% in the year to the end of June, compared with 2.8% in the UK. In Wellington, the capital, they soared by more than 18% in the same period. A report by the Economist this year showed New Zealand had the most unaffordable house prices in the world, with prices in Auckland climbing 75% in the last four years, although the market has cooled in recent months.
The country’s proposed ban on foreign buyers, which would only apply to non-domiciles, comes amid rising support for protectionist policies in developed nations around the world. Trump rode to election victory by pledging more jobs and support for US citizens, while the Brexit vote has been interpreted as a call to prioritise British workers over European migrant labour.
The steps announced by Ardern form part of a coalition deal unveiled this week by her Labour party and the minority partners forming her government – the Green party and anti-immigration New Zealand First. It follows a campaign pledge by Labour to crack down on “property speculators”.
Speaking after the announcement of the ban on foreign buyers of existing homes, the leader of NZ First, Winston Peters, said: “There’s going to be a change and a clear signal sent internationally that New Zealand is no longer for sale in the way it has been. And we are happy with that.”