New Zealand to block foreign buyers from local housing market
Ownership levels are at their lowest in 66 years.
Under new policy direction from Prime Minister-elect Jacinda Ardern, non-residents of New Zealand will, in the future, be prohibited from purchasing existing homes and properties on the Pacific island country.
"We have agreed on banning the purchase of existing homes by foreign buyers," New Zealand's second youngest Prime Minister, 37-year-old Labour Party leader Jacinda Ardern, told local media earlier this week.
Arden said the policy has the backing of her coalition partners, the New Zealand First Party and Green Party.
Housing affordability in New Zealand is a contentious issue. In August, data released by Statistics New Zealand revealed ownership levels in 2016 had sunk to their lowest in 66 years, since 1951.
Of the 1.8 million homes available in New Zealand in December 2016, 1.2 million (63.2%) were owner-occupied and 604,900 (33%.6) were renting. Ownership (61.2%) and renting (33%) proportions were similar in 1951.
The last time record high ownership levels existed was 26 years ago, in 1991, when there were 848,916 (73.8%) owner-occupied homes and renters only accounted for less than a quarter (23%) of the overall housing market.
House prices across New Zealand have risen by more than one third (34%) in the last three years, spurred on by record-setting immigration, low interest rates and a growing shortfall of necessary housing supply.
Earlier this year, ANZ Bank published a report which suggested New Zealand's housing shortage was growing by an estimated 4,000 homes per quarter, resulting in a national shortfall of around 60,000 dwellings.
The Real Institute of New Zealand (REINZ) released data last month which revealed median house prices in New Zealand's biggest city, Auckland, had reached NZ$845,000, almost double that reported a decade earlier.
As property prices in Australia skyrocket, many would-be investors look across the ditch for opportunities. However, those prevented from buying in New Zealand may focus their intentions on the Australian market.