Expats safe from NZ ban on foreign property purchases

Expats safe from NZ ban on foreign property purchases

Expats safe from NZ ban on foreign property purchases

New Zealand’s new ban on foreign property purchase won’t include expats with permanent residency.

In a bid to cool New Zealand’s overheating property prices, the newly elected government will ban foreigners from investing in the country’s residential property market. Over several years, house prices in New Zealand have soared to an unsustainable level, mostly due to low mortgage interest rates and a shortage of supply. At the same time, the numbers of foreign buyers have also soared as the islands are increasingly popular with investors from Asia and Australia.

Wealthy foreign investors view the country as a safe haven, leaving the most popular cities including Auckland with a major shortage of properties along with ever-increasing asking prices. Data gathered from real estate agencies indicates it’s not just the capital which is suffering from a price boom and housing shortage , with the median price now standing at $530,000. Auckland’s median price is now a staggering $850,000, although indications suggest a fall of 3.2 per cent over the past year.

The housing shortage in New Zealand’s large cities and the issue of foreign ownership were both prominent in the months before September’s general election, which changed the political landscape following nine years of rule by the conservative National Party. New Prime Minister Jacinda Arden announced her ban on foreign property ownership soon after the election, and is introducing an Overseas Investment Act as well as a comprehensive register of foreign-owned properties and land.

In addition, the government is considering the introduction of a rent-to-own scheme or other progressive ownership model in order to help prospective buyers achieve their dreams. A new Housing Commission is to be established, with all the new measures aimed at building more affordable homes suitable for first-time buyers as well as providing increased numbers of state-owned homes for families in need.

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