The New Zealand Parliament approved a new law on Wednesday, Aug. 15, banning the sale of residential property to most foreigners.
While the law targets no particular foreign group, the adoption of the new measure follows a public outcry over the sharp rise in property value, driving residents out of the housing market.
Prior to the new law, New Zealand law did not bar any foreign ownership of houses.
Over the past several years, a string of high-profile foreigners have purchased large residential homes in the country, particularly in and around Auckland. In the last decade alone, home prices in New Zealand have surged some 60 percent.
While immigration, the existing problem of home shortages and skyrocketing rents are factors in the rise of home prices, experts say foreign purchases have contributed to a 70 percent drop in residential ownership among New Zealanders.
The new law is the result of Prime Minister Jacinda Ardern’s election-season pledge to address the housing shortage, high home prices, and homelessness, in part by banning foreign home buyers.
“This is a significant milestone and demonstrates this government’s commitment to making the dream of home ownership a reality for more New Zealanders,” Associate Finance Minister David Parker said.
Under the new law, to control overseas home ownership, foreign citizens are restricted from buying existing homes apart from gaining permission from the New Zealand Overseas Investment Office.
Foreigners seeking homes in New Zealand must demonstrate their intent will have beneficial affects to the country.
The law applies to every nation, except citizens from Singapore and Australia, which gained exemptions from the law over New Zealand’s trade agreements with Singapore and Canberra.
The law’s passage follows virtually identical measures in Canada and Australia to control foreign home purchases.
A watered-down bill, the original bill weighed earlier this year, which prohibited foreigners from taking ownership exceeding 60 percent in new, large apartment complexes and prohibited residents of Singapore from purchasing homes.
[ABC] [BBC] [The Straits Times] [Photo courtesy NetChange]