Hint of xenophobia in concern at foreign buyers
It is hard not think that the concerns about Asian buyers outbidding Kiwis for properties, and pushing up the price, stem from xenophobia.
Tuesday, November 20th 2012, 12:00AM 
7 Comments
by The Landlord
An Auckland real estate agent has spoken out, concerned about Chinese buyers paying top dollar for properties and forcing New Zealanders out of the market.
It comes amid claims that the New Zealand property market is one of the least regulated in the world for foreign nationals with money to spend
But every time research is done into this subject, it turns up the fact that while Asian buyers may be a favourite target for the finger-pointers, they aren’t the people buying up large in this country.
The Overseas Investment Office says foreigners only need approval under certain conditions, such as when a deal is worth more than $100 million, when more than 5ha of land is involved or if the land is deemed sensitive, such as farmland or land adjoining a reserve or on the edge of a lake.
The office’s statistics show that Chinese ownership of land in New Zealand is 150ha, compared to 20,000ha owned by US investors.
British and Australian investors are by far the biggest foreign purchasers of land in New Zealand.
Between 2007 and 2011, Australian investors paid $10.6 billion in OIO transactions. They were followed by the US, with $10b, Japan at $5b and the UK at $3b. China does not even register in the lengthy list of countries that have invested. The 2002 to 2006 figures show Chinese investors were responsible for deals of just $162 million.
The argument that absentee landlords channelling Kiwi dollars back to their home nations are bad for this country is understandable but when we start drawing lines, it’s hard to know where to stop.
If a New Zealander owns a property, and is moving overseas, should they be forced to sell, even at a loss?
If someone has their property on the market, should they be forced to take a lower offer from a Kiwi resident over a better deal from a foreign buyer?
If we are going to clamp down on foreign ownership, it should affect all foreign owners – and come with a full understanding of the potential consequences.
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Comments from our readers
Brave are those who bought when the market was down and holding their portfolio on today's up market. Pity are those who bought during the height of the market and have to relinquish their portfolio during the down market.
Let's embrace the benefits from foreign investments. Its benefits will surpass its cost.
Learning from one of the known Kiwi investors in property investing...Patience.
China has 300m + people now of middle class status. Those in China with money are looking to invest and among other things lock in inter generational wealth in safe havens. NZ is seen as desirable for a number of reasons. Lack of corruption, security of investment are some of the factors.
Contrast that to our population of 4.5m and you can easily see that only a fraction of a fraction of 300m people entering our housing market could have an upward impact on our natural demand population demand for housing.
At the very least we need a register to record who is buying residential property by way of a question on the sale and purchase agreement. i.e. is the ultimate purchaser a foreign national/NZ citizen etc
When it comes to residential property I have no problem in legislation that would allow only NZ citizens or permanent residents to own residential property and in fact suggest this. As an alternative a tax on foreign nationals entering/exiting the residential property market could be imposed.
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