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New Zealand Bans Sales of Homes to Foreigners

posted by mrpg on Thursday August 16 2018, @09:30PM   Printer-friendly
from the green-go-home dept.

takyon writes:

New Zealand bans sales of homes to foreigners

New Zealand's parliament has banned many foreigners from buying existing homes in the country - a move aimed at making properties more affordable. The ban only applies to non-residents. Australians and Singaporeans are exempt because of free-trade deals.

New Zealand is facing a housing affordability crisis which has left home ownership out of reach for many. Low interest rates, limited housing stock and immigration have driven up prices in recent years.

[...] [Foreigners] are now banned from purchasing most types of homes - but they will be able to make limited investments in new apartments in large developments.

[...] Chinese investors have been among the biggest and most active offshore buyers of property in the New Zealand market. Also, some wealthy Americans - like Silicon Valley tech billionaire Peter Thiel - have become New Zealand citizens or have bought property in the country. Average prices in New Zealand have risen more than 60% in the past 10 years, while in Auckland - the country's largest city - they have almost doubled.

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  • (Score: 1) by khallow on Friday August 17 2018, @03:55AM (5 children)

    by khallow (3766) Subscriber Badge on Friday August 17 2018, @03:55AM (#722687) Journal

    The tenant then needs higher income/profit to pay for the higher rent.

    The whole cycle breaks down when the tenant doesn't pay more rent.

  • (Score: 0) by Anonymous Coward on Friday August 17 2018, @04:56AM (2 children)

    by Anonymous Coward on Friday August 17 2018, @04:56AM (#722694)
    And where will the tenant go?

    • (Score: 1, Informative) by Anonymous Coward on Friday August 17 2018, @05:16AM

      by Anonymous Coward on Friday August 17 2018, @05:16AM (#722699)
      They'll pick up guns and put the rich up against the wall and start shooting.

    • (Score: 1) by khallow on Friday August 17 2018, @11:40AM

      by khallow (3766) Subscriber Badge on Friday August 17 2018, @11:40AM (#722763) Journal
      Some place cheaper.

  • (Score: 0) by Anonymous Coward on Friday August 17 2018, @09:13AM (1 child)

    by Anonymous Coward on Friday August 17 2018, @09:13AM (#722730)

    The bubble bursts if this happens a lot. But for a long while before that the landlords kick the tenants out and try to get new ones. Look at how high rents are in some places. If the landlords don't manage to get enough rents to pay the banks, the banks take over the property.

    I suppose this is supposed to be the market intelligently allocating resources... But I need a lot more convincing...

    See also:
    https://www.vox.com/2016/9/14/12892994/facebook-silicon-valley-expensive [vox.com]
    https://www.mercurynews.com/2018/02/14/buying-a-bay-area-home-now-a-struggle-even-for-apple-google-engineers/ [mercurynews.com]
    http://observer.com/2018/02/google-facebook-engineers-cannot-afford-silicon-valley-houses/ [observer.com]

    • (Score: 1) by khallow on Friday August 17 2018, @11:38AM

      by khallow (3766) Subscriber Badge on Friday August 17 2018, @11:38AM (#722760) Journal

      I suppose this is supposed to be the market intelligently allocating resources...

      Only if you ignore the typical non-market obstructions to the market allocating said resources (like restrictions on new construction and zoning). "Foreign investors" are merely a scapegoat for yet another dysfunctional market.