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.
(Score: 4, Insightful) by ikanreed on Thursday August 16 2018, @09:34PM (13 children)
The rich are at fault, and the foreign are blamed.
(Score: 4, Insightful) by Anonymous Coward on Thursday August 16 2018, @09:40PM
Speculators and greedy real estate agents. Foreign based billionaires buy up huge tracts of pristine land and then citizens lose access. Auckland is a disaster zone. The elderly cannot keep up with rates hikes and are taking to living in their cars, the working poor are a swelling number who cannot even meet the rents (rent pays the landlord's mortgage and rates plus a chuck for the greedy landlord). Many landlords are foreigners who are in absentia or if they are in NZ are only here to buy up more homes and turn them into rentals. This law change is about 15 years too late.
(Score: 5, Informative) by Mykl on Thursday August 16 2018, @11:27PM (11 children)
In the case of New Zealand it is actually the foreigners who are to blame.
New Zealand's total population is about 4.9 million. That's less than 1/286th of China's population of 1.403 billion. In other words, the top 0.35% of China's wealthy outnumber the entire population of New Zealand.
Chinese nationals have been looking for ways to safely store cash offshore for years now. Property in stable democracies is a very popular investment, and New Zealand is one of the most stable and safe democracies in the world. This alone has driven a massive amount of buying from Chinese investors.
Australia enacted similar restrictions about a year ago, which (amongst other reasons) has already led to modest drops in housing prices across major markets [news.com.au].
(Score: 1, Troll) by Ethanol-fueled on Thursday August 16 2018, @11:51PM (2 children)
Good leadership puts its own people first, whether or not the rich foreigners driving property costs out of reach of the domestic population are Chinese. Even fucking Mexico does this with coastal property. Now it is time for America to do the same...
...or the next best thing, like Australia, which is to give Whites preferred immigration status.
Personally I like the idea of allocating Mississippi to being our "foreigner containment zone." All 'dem po' folks who bought a shack for $20, 000 bucks can sell it to foreigners for millions and move to a state with a higher standard of living, and rich Chinese can have a sensible backup plan -- they're already used to eating mudbugs and having to shit in holes dug in the ground. Having half-functional electricity and being able to flush their toilet paper down the toilet, and not having their organs harvested for insulting the nation's leadership, would be well worth the humidity.
(Score: 0, Flamebait) by Anonymous Coward on Friday August 17 2018, @12:11AM (1 child)
Again with the stupid. Give it a rest already.
(Score: 0) by Anonymous Coward on Friday August 17 2018, @06:08AM
He's proposing using real estate sales on a free market to achieve one-time wealth redistribution.
Your only problem with it is that it's anti-capitalist/globalist, i.e. your 1%er masters will be indirectly harmed by a handful of proles rising above their station in life.
(Score: 1, Interesting) by Anonymous Coward on Friday August 17 2018, @01:23AM (4 children)
Typically outsiders visiting is good for the economy as they bring their money with them, but artifically accelerating the exhaustion of real estate probably just hurts the average inhabitant more overall. Presuming the assessment is absolutely correct in NZ, I don't have a gram of doubt in their decision.
(Score: 0) by Anonymous Coward on Friday August 17 2018, @05:37AM
Somehow, 30% doesn't strike me as a majority. You can't count. More likely, you can't tell the difference between Chinese, Tibetan, Japanese, Sikh, Thai, Indonesian, Vietnamese...
In the 1990s, when the British lease on Hong Kong was clearly not going to be renewed, Vancouver rolled out a welcome mat and practiced their welcoming hug. It paid off handsomely, there were a few years of construction boom, and then things settled down. You'd have to be a local to notice the difference; BC had a large Chinese contingent to begin with, as the western Canadian railways were pretty much built by them over 150 years ago. But the Chinese ethnic composition has nothing to do with the current real estate bubble.
That is 100% the government, banks, and real estate industry turning a blind eye to foreign money laundering. A report came out earlier this year that under the previous administration whenever junior government staff (not in on the take) raised the issues with their superiors, they got told "we're looking into it, thank you, leave it be."
(Score: 2) by PiMuNu on Friday August 17 2018, @11:40AM (2 children)
In London it is Russians, or so they say. I have no statistics to back up the anecdotal evidence.
(Score: 0) by Anonymous Coward on Saturday August 18 2018, @03:21PM (1 child)
muslims now own a large portion of London
England has a problem.
https://www.express.co.uk/news/world/743825/1000-Muslims-close-London-streets-chant-Allahu-Akbar-demand-Islamic-caliphate [express.co.uk]
"A poet invited to talk shouted: "We need a Caliph who will clean up these streets. Who will smack up armies and who will back beef [fighting].
"Backhand your missiles back to your land, that’s the plan.
"World domination at hand. We can expand and take out these fools.""
(Score: 0) by Anonymous Coward on Saturday August 18 2018, @03:23PM
http://www.dailymail.co.uk/news/article-2523658/Muslim-campaigners-protest-sale-alcohol-popular-East-London-area.html [dailymail.co.uk]
(Score: 4, Insightful) by JoeMerchant on Friday August 17 2018, @10:47AM (2 children)
Instead of banning them, why not tax them?
Owners not resident in the country at least 9 months of the year can pay a foreign ownership property tax, rate to be raised until the problems subside.
This doesn't stop retiree immigrants, but I don't think they're the real problem, are they?
🌻🌻 [google.com]
(Score: 2) by ikanreed on Friday August 17 2018, @01:58PM (1 child)
Because the trick of it is, the only wealth they're moving into the country is exactly enough to own the land.
There really needs to be an international standard that above a certain level of income, hiding assets from taxation is a capital* crime.
* see what I did there, see? SEE? SEE?????
(Score: 2) by JoeMerchant on Friday August 17 2018, @05:29PM
Property tax is an awesome method of wealth extraction... just look at all the empty beachfront mansions in Florida - it's a huge income base for the counties, and nearly 100% of that money is coming into the county from the outside. Not only do they pay property taxes, but they also don't "tax" the infrastructure since they're rarely, if ever, there - no additional traffic on the roads, especially no additional children in the public schools, etc.
🌻🌻 [google.com]
(Score: 2) by bob_super on Thursday August 16 2018, @09:48PM (12 children)
Eyeballing it [google.com], it looks like about 2.5 to 3% annual GDP growth on average.
60% in 10 years is 4.8%, 2x in 10 years is 7%.
Unlike the US doing nothing about the cost of education outpacing incomes and inflation by a factor of 2, it's nice to see that NZ is acknowledging they have a problem.
Sales to foreigners is a pretty small segment of their market (and I'm sure airbnb and earthquakes are also significant factors), but you gotta start somewhere.
(Score: 3, Interesting) by PartTimeZombie on Thursday August 16 2018, @10:18PM (7 children)
I live in a fairly nice Auckland suburb and my house has more than doubled in value since I bought it in 2010. I wouldn't sell for less than $1.6 million, based on what my next-door neighbours paid about 18 months ago.
Purely anecdotally, one Chinese guy in my street is known as the "Money Launderer" because of his odd lifestyle.
He looks to be about mid-50's but his "wife" looks about 25 (if that). They are in the house maybe 1 week in 5, and both drive $150,000 + cars which is unusual for our neighbourhood.
One of my other neighbours is expecting a massive police raid at some point, then tales of some sort of illegality or other. I'm looking forward to that if it happens.
(Score: -1, Troll) by Anonymous Coward on Thursday August 16 2018, @10:28PM (1 child)
Yeah, goddamned Chinese should go back to China where they belong.
(Score: 0) by Anonymous Coward on Thursday August 16 2018, @10:46PM
If you want mass immigration, build the houses first!
(Score: 1) by Ethanol-fueled on Thursday August 16 2018, @11:52PM (1 child)
There seem to be a lot of restaurants here that are open only during odd hours and for only a few hours 3 days a week. Some of them are in nice neighborhoods with $750,000-dollar homes. Really makes you think...
(Score: -1, Flamebait) by Anonymous Coward on Friday August 17 2018, @01:03AM
But it hasn't made *you* think at all. Stupid.
(Score: 0) by Anonymous Coward on Friday August 17 2018, @01:01AM
The Goog tells me that 1,600,000 New Zealand Dollar equals 1,053,920.00 United States Dollar.
Sounds like your neighborhood could be on par with some of the towns in Silicon Valley?
(Score: 0) by Anonymous Coward on Friday August 17 2018, @03:51AM
Maybe it's just because I'm an American, but is it really strange for people who live in million+ homes to have trophy wives, nice cars, and be gone on business often?
(Score: 0) by Anonymous Coward on Friday August 17 2018, @03:38PM
Is his wife Chinese to? Maybe she just looks 25.
(Score: 0) by Anonymous Coward on Thursday August 16 2018, @10:41PM (3 children)
Not true. [cnbc.com] It's not just education though, government rent subsidies inflate the price of property. Why the fuck would a government be giving money to private landlords so that a private company in Manhattan can pay less wages to cleaners? When it all goes wrong, the self-serving clowns in government want to blame the freemarket after using our tax money to fuck it up for everyone!
(Score: 0) by Anonymous Coward on Thursday August 16 2018, @11:01PM (2 children)
http://steshaw.org/economics-in-one-lesson/chap18p1.html [steshaw.org]
(Score: 0) by Anonymous Coward on Thursday August 16 2018, @11:22PM
https://en.wikipedia.org/wiki/Tragedy_of_the_commons [wikipedia.org]
(Score: 0) by Anonymous Coward on Friday August 17 2018, @12:47AM
Good link but rent controls and subsidies are not the same thing, both are disastrous but for different reasons. One of the key differences is opportunity cost, with subsidies the money government pays in subsidy to private landlords could have been spent by government elsewhere while the landlord gains investment income. Conversely with rent control, the landlord loses investment income. The two are commingled by affordable housing mandates which effectively subsidise the income of the tenant to the benefit of their employer. It's robbing Peter to pay Paul on behalf of Philip (who lobbies the hardest).
(Score: 5, Interesting) by MrGuy on Friday August 17 2018, @01:30AM (1 child)
The idea of the law is that non-resident foreigners can't buy most real estate.
At least in the US, if we had a comparable law, there would be an easy workaround - form an LLC in the US, and have the LLC buy the property. You do not have to be a US citizen to form an LLC in the US. Because the LLC is a US corporation, it's a "domestic" buyer, and it's hard (in some cases, nearly impossible) for the seller to even know the effective owner will be a non-citizen. Most of the apartment buildings I've lived in in the US were owned by LLC's, rather than the owner directly (this was primarily for liability purposes, not for hiding ownership, but it still proves the point it's trivially easy in the US for an LLC to buy and hold property).
Wondering if New Zealand has a similarly easy passthrough corporate structure that would effectively make this measure dead on arrival (which, again, I argue it would be in the US....)
(Score: 2) by DavePolaschek on Friday August 17 2018, @01:54PM
Looked to me (when I read the article) as though most foreigners couldn't buy houses but it was perfectly legal to buy vacant land and build houses on it.
(Score: 1, Interesting) by Anonymous Coward on Friday August 17 2018, @03:06AM (8 children)
Say someone buys property X. Then sells it for double. The new owner has to pay the bank more, and so rents it out for more. The tenant then needs higher income/profit to pay for the higher rent. And so the costs for everyone goes up.
So the increase in the price of your latte/sandwich/etc is actually mostly due to high property and rental costs (the wages going up is just a side effect of high property costs).
Does the quality of the latte actually go up in accordance to the price? I doubt it. So you're paying more for less for almost everything in that area. And why? So rich people can play Monopoly in real life?
When the bubble bursts the rich buy and extend their monopolies. The cycle starts again. Property bubbles mainly benefit the rich. Even if the nominal value of what they're worth halves they won't starve while they wait for the bottoming out and they can buy a lot more in the aftermath.
Are the alternatives a greater evil? In some places it may not be so good to be a property owner because of the laws (e.g. rental caps): https://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/ [qz.com]
(Score: 1) by khallow on Friday August 17 2018, @03:55AM (5 children)
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)
(Score: 1, Informative) by Anonymous Coward on Friday August 17 2018, @05:16AM
(Score: 1) by khallow on Friday August 17 2018, @11:40AM
(Score: 0) by Anonymous Coward on Friday August 17 2018, @09:13AM (1 child)
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
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.
(Score: 1, Interesting) by Anonymous Coward on Friday August 17 2018, @05:44AM
That's why, even though I'm in the bottom quintile of wage earners, I decided to be rich and it seems to be working.
People told me I was stupid when I bought a junked trashed house and sent me articles from the NYT saying how home ownership was a bad idea. Maybe it is and I just got lucky, but it's working well and in the absolute worst case, I will always have a warm place to sleep, even if it is with roommates who pay for my food and property taxes.
(Score: 0) by Anonymous Coward on Friday August 17 2018, @09:58AM
Yes - the property market is hideous, but the Millennials aren't helping themselves.