As an affordable housing crisis looms, New Zealand is set to ban property sales to non-resident foreigners. The housing shortage and debate on foreign home ownership were major issues in the run-up to last September’s election, which unseated the conservative National Party after nine years in power.
A continuous surge in Chinese investment to New Zealand’s real estate market has been one catalyst for the change in policy. Juwai.com, a real estate site based in China, pushed an aggressive advertising campaign through December targeting New Zealand properties ahead of the ban.
According to official government figures, Chinese nationals were the largest segment of permanent migrants to New Zealand in 2015 at 17% of total arrivals. Nearly half had taken advantage of the country’s investor visa scheme the previous year. The proposed housing ban will not apply to those who have gained residence through any of New Zealand’s golden visa programs.
The current Investor Visa (Investor 2 Category) requires a minimum $3 million NZ investment over a period of four years. Prior to 2016, the program only required half the current amount, but was doubled in an effort to stymie the flood of applications. Nearly $2.9 billion NZ had been invested through the program from its inception in 2009 through to 2016.
New Zealand’s entrepreneur visa has also proven to be an attractive path to permanent residence. About 70% of the recipients in 2016 were from China, many of whom were family members of applicants. The popularity of the visa prompted the government to create the Global Impact Visa in an effort to draw riskier, more innovative ventures to the country.
The proposed ban on property sales to non-residents was moving through parliament as of December. However, it remains to be seen what the real impact of the ban will be, considering the popularity New Zealand’s golden visa programs.