New Zealand Bans Buying Houses by Foreigners

In her annual report, The IMF criticised the move, claiming that the “foreign buyers appear to have played a small role in the residential real estate market in New Zealand recently”.

If the government's broader housing policy is fully implemented, it “would address most of the potential problems related to foreign buyers on a less discriminatory basis”, the report says.

Home prices in New Zealand have risen dramatically about 60 percent since the financial crisis. The increase came as a result of a combination of factors, including limited supply, low interest rates that sparked a boom in foreign borrowing and speculation.

According to the Foreign Investment Act proposed last year, the New Zealand government plans to reduce immigration and focus on regional development and job creation. If the act becomes law, he will bring New Zealand into line with neighboring Australia.

The law would classify residential soil as <x0 sensitive”, which means non-residents or non-citizens cannot buy existing dwellings without the consent of the Foreign Investment Office.

Non-resident foreigners will be allowed to invest in new constructions, but they will be forced to sell once the houses are built.

IMF mission chief Thomas Helbling said a ban is a highly defined <x0 scale” and could send a negative signal to foreign investors more widely.

Selling land is also a sensitive issue for Australia because of concerns foreign investors are buying property to meet the demand for growth in Asia.

Last year, the Australian government blocked buying from a Chinese consortium, which was intended to buy 11 million hectares belonging to the country's largest private owner.