The idea of banning offshore-based investors from buying existing New Zealand properties appears to be popular, judging by results from interest.co.nz's latest reader poll.
We recently ran an online poll based on BNZ economist Tony Alexander's radical eight point plan to tackle the rising housing market.
In response to being asked which of the eight suggestions they most favoured, 34% of the 880 readers who responded thought that banning house sales to non-residents was the best idea.
The question of non-NZ-based buyers of existing houses has become a real issue particularly in the sizzling Auckland market, which has seen house price inflation of close to 15% in the past year.
There have been widespread, anecdotal, tales of overseas buyers buying up large, particularly in Auckland, though the BNZ-REINZ housing survey, which has attempted to quantify how much of this activity really is taking place, has indicated it is not currently as widespread as the gossip would have it.
The BNZ's Alexander has, however, warned that overseas-based buying of NZ houses is only likely to increase in future as we form closer trading relationships with Asian countries, particularly China. He says he favours an Australian-style solution whereby overseas-based investors cannot buy existing houses but can buy new houses or have new houses built. Such a solution would have the positive impact of adding to NZ's housing supply and would provide local work.
To this point the Government has not appeared to give any indication it would favour such a move.
The second most-favoured option was the always-contentious issue of implementing a capital gains tax on second properties. Alexander's option also included CGT on farmland and an immediately payable stamp duty for all second-house purchases. The CGT option attracted 28% of survey respondents.
It would appear extremely unlikely this Government would ever implement such a tax, though it is current Labour Party policy.
This means that the top two choices, the banning of offshore-based buyers and the capital gains tax attracted 62% of the vote, making them seemingly popular choices.
Among the rest, were:
- Rezone all land within 10-20 kilometres of existing city boundaries as residential, 11% (99 votes)
- Create an SOE whose sole purpose is to undercut existing building materials suppliers, 7% (64 votes)
- Ban councils from imposing any development fees and allow developers to instal their own infrastructure, 7% (64 votes)
- Initiate a large builder training programme targeting not just youth but low skilled migrants, 5% (44 votes)
- Initiate a new large state house building programme relying largely on the to be created new carpenters etc, 5% (40 votes)
- Impose a tax on all houses owned by Kiwis offshore with the aim of encouraging them to sell them, 4% (31 votes)
Alexander conceded that there was little or no chance of any of these measures being picked up. But interest.co.nz readers seem to certainly think there's some merit in some of the ideas.
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