New Zealand will ban foreigners from buying existing homes, joining a growing list of nations trying to make property more affordable for their citizens.
“Foreign speculators will no longer be able to buy houses in New Zealand from early next year,” Prime Minister Jacinda Ardern said at press conference in Wellington Tuesday. “We are determined to make it easier for Kiwis to buy their first home, so we are stopping foreign speculators buying houses and driving up prices. Kiwis should not be outbid like this,” Bloomberg reported.
House prices have surged in recent years, driving the average value in the nation’s biggest city, Auckland, to more than NZ$1 million ($685,000) and putting property out of reach for many younger Kiwis. While New Zealand joins other countries in restricting or heavily taxing sales of existing homes to foreigners, such measures have done little to curb prices in places like Hong Kong and neighboring Australia.
“Foreign buyers of existing homes have become the target of governments globally with increased taxation and buying restrictions,” said Sophie Chick, head of residential research at Savills Australia. “This though hasn’t really put the brakes on foreign investors who often prefer to buy off-the-plan anyway.”
Chinese money has pushed up home prices around the world, stoking concern among locals in cities from Vancouver to Sydney. Auckland is the fourth-least affordable property market in the world, according to Demographia.
Ahead of the Sept. 23 election, Ardern’s Labor Party campaigned on making home ownership—which has dropped to its lowest level since 1951—more attainable for first-time buyers.
However, there is limited data on how many non-resident foreigners actually buy residential houses in New Zealand, with the previous government claiming they accounted for as little as 2% of overall purchases.
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