By Alex Tarrant
Just what is the Government doing to increase its awareness of how much New Zealand residential property and land is foreign-owned?
The Minister responsible for the Overseas Investment Office suggested recently that a new work-stream had been developed by Land Information New Zealand (LINZ) and Stats NZ to knuckle down on ownership not captured by the Overseas Investment Office process.
Land Information Minister Mark Mitchell had the following exchange on TVNZ’s Q&A a couple of weeks ago:
JESSICA Is it robust, though, minister? Because we can’t quantify how much of New Zealand land is actually foreign-owned. The OIO looks at iconic and special land, but a piece of land that’s owned by a Chinese buyer or a Russian buyer that might be quite beautiful but doesn’t meet that iconic status, that’s not captured in those figures.
MARK I think that Statistics New Zealand actually is developing processes that allows us to capture a lot more of that information.
Sounds like something’s happening, right? Well, not as much as you’d think.
That Mitchell answered that question with that statement appears a bit disingenuous when you hear what Stats NZ helped out out on.
Asked about the comment and whether there was a specific work-stream in place at Stats NZ on the issue, a Stats spokesman said: “Stats NZ is assisting Land Information New Zealand in their work on land ownership information. Please refer to LINZ for further information on their work.”
So far so good. I went to LINZ. A spokesman elaborated:
As a result of amendments made to the Land Transfer Act in 2015, LINZ collects tax-related data when people buy, sell or transfer property. This is collected to help Inland Revenue follow up on those people who have tax obligations. We are also required to ask questions that help inform housing policy. This information is collected through a tax statement.
We have carried out some work to improve the tax statement for gathering this information so that the next report, covering January to March 2017, will allow transfers involving work or student visa holders to be separated out. Statistics NZ were involved in this work given their expertise in questionnaire design.
Before we go on, this piece is in no way designed to be critical of Stats NZ. They’re the Government’s premier questionnaire designers. Another department asked for help, and they gave it. That’s fine.
I just don’t think the Land Information Minister should get away with claiming Stats NZ is developing a process to capture “a lot more” foreign ownership information when the work being done is trying to improve an existing questionnaire that has been used for more than a year, and where that work involves trying to get people to better remember whether they are in the country on a work or student visa.
The government’s 2015 Land Transfer Amendment Bill was designed to make it easier for the Government to gauge the level of NZ property purchases by foreigners (well, non-NZ tax residents, to be specific).
The amendment introduced the quarterly publication of figures used to show a miniscule amount of property purchases are made by non-tax residents. It has allowed for government lines such as “in October to December 2016, 2 percent of property transfers involved overseas tax resident buyers.”
But the data collection methods received a bunch of criticism.
In fairness, LINZ itself said it was improving how it gathered information on a question asked to home buyers and sellers as to “whether they or their immediate families were work or student visa holders and, if so, if they intended to live on their land.”
The results to this question are inaccurate and should not be used as 48% of those who answered as if they held a work or student visa, also claimed the main home exemption (that is only available to New Zealand citizens and residents).
We have made improvements to the way we gather this information, and will have precise information on transfers involving work or student visa holders in the report covering January to March 2017.
And that is what Stats NZ was helping out with. Not as exciting as it sounded on the telly.
Oh, and just so you know, Mitchell is Minister for Statistics as well.
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44 Comments
So officially we still don't have much more than a vague idea about the levels of foreign buying. The impression Mitchell gave that the Stats NZ changes were significant and would enhance our knowledge about the extent, is clearly not correct. It was either an attempt to mislead or shows he doesn't have a handle on his portfolio.
complete incompetence by the department. Let us remind ourselves when the Bill came out
The government’s 2015 Land Transfer Amendment Bill.
2015 so 2 years has passed as we still don't have the right data. In the corporate world people would be fired yet in Government this seems to be the norm. At a guess they knew this was coming before the Bill was passed so it may even be close to 3 YEARS.
Complete incompetence combined with National DELAY TACTICS
Not sure how difficult it was to come up with the questions.
1. Do you have NZ Citizenship?
[If your answer if yes skip questions 2,3,4]
2. Do you have a Permanent Resident visa?
[If your answer if yes skip questions 3&4]
3. Are you a Foreign Student? (Y,N)
4. Are you on a temporary Work Visa? (Y,N)
Bang on !
This is what everyone has been saying that release the correct overseas data in public domain and if the national government does not want to act on foreigners is fine as that is their prerogative being in power BUT why manipulate and lie.
When the first data was released last year or before, it was mentioned that the way questions were been asked has an error (Question form) and will be rectify to reflect the correct non resident buyer data but nothing was done as it suited the National bosses (May be National directed not to do as only they had a lot to hide and lose if correct data was announced to public instead of 3% that suited their agenda).
Everyone has been shouting but even the media till now has been silent on the issue.
Opposition has to do nothing but just get the correct non resident/overseas data to the people and national will be history.
Good thing is under Labour their housing minister has stated that they will ban
- Foreign Residents & Foreign Non Residents buying existing properties.
- Foreign Residents would include Foreign Students and Foreign Temp Visa workers
- Companies/Trusts with 25% foreign stake would also be banned
This will bring NZ in-line with Australia's foreign buyer definition finally
http://www.sro.vic.gov.au/foreignpurchaser
Well done Labour an election winning policy !!!
I can't believe I'm actually reading a sentence with "Labour" and "election winning" in it together! After eight years of floundering around they finally have some succinct and concrete policies that both Joe Average and New Zealand needs. I was going to vote for TOP but now it might be Labour.
The noise from Joe Public on the housing situation (and immigration) has become too loud now to ignore! I'm not sure that Labour in previous years was any more keen on changing things than was National. But now the election is nigh, Labour has jumped from the blocks quicker than National.
Just maybe Labour really is getting their act together.
Yeah, Labour has finally got its sh!t together and is starting to act like a political party. As the Opposition for 8 years, you would think that they could have come up with some tangible policies to counteract or solve the problems caused (and exacerbated) by National. I've wanted to vote for an alternative to National since 2011 but there hasn't been one. You could choose between the do-nothing status quo, the incompetent leftie rabble or a variety of minnows who would never gain any political power.
'you would think that they could have come up with some tangible policies to counteract or solve the problems caused (and exacerbated) by National'
I am no National Party apologist - I will be voting them out - but that is wrong.
They did not cause the problem. Greater blame lies with Labour for that.
Remember, the crisis was already building in 03/04. Labour promoted immigration, they made house building even harder, and they built few state houses.
the genesis of the crisis lies in the Clark Labour government.
However, National have done far too little far too late to address the crisis, and that's where the blame on them lies. Especially as Key campaigned prior to being first elected on addressing housing. Big Big fail there for him and that will come back to seriously undermine his legacy.
Well said (written) Fritz. Labour did start it all with the FTA with China which allowed immigrants to NZ to bring 1 million dollars, which they could invest in residential property! Stupid, stupid, stupid! We are paying the price now, particularly in Auckland.
As regards 'some tangible policies to counteract or solve the problems caused (and exacerbated) by National'; if I had just lost the 2014 election and I had some tangible policies up my sleeve, no way would I release them 2.5 years prior to the next election, and give the Government ample time to either copy them or beat them. So I don't blame Labour for shutting up until now.
G'day Fritz. I had to log in after a long absence and say I fully agree with your comments in terms of the historical context (Labour/Clark) and the current government's (National/Key/English) perpetuation of mediocrity.
What I find enormously frustrating, and it most certainly is not a blue/red/whatever your favourite colour, is the lack of concrete data, and a willingness to approach the issue in an intellectually honest way.
What do we want? To understand who owns real estate in New Zealand. To understand if there is a problem with slushy overseas funds flowing in and pumping up the property market, and how we can address this for the good of our country.
While I agree the signs point to yes, the lack of hard, impartial data does risk this becoming a speculative witch-hunt for johnny foreigner. And to be honest, the world is becoming increasingly global, and I'd prefer to have a bunch of intelligent, motivated foreigners, than some of the "but wait I don't get $100 an hour for chilling out with my finger in my jacksy? Stick your job!" types.
Xenophobia and it being someone else's fault are always sweet, siron songs for those unwilling to face their reality of inadequacy and bad attitudes.
I'm based overseas, so I watch all this play out past the breakers, and of all the nationalities I meet, we're pretty much after the same thing; shelter, security, meaningful engagement in society. And when there's a problem with our society, we must address it without hyperbole, and with cold, hard, impartial facts.
Major issue with the current minister - the whole interview reeks of:
"Yeah, well, the other guy is gonna do something about it real soon".
"Ummm, that other responsible guy you pointed to is actually yourself".
"Shhhhhh, you weren't supposed to check anything I said in any detail, just relax, she'll be right mate!"
It's utter nonsense, and people need to vote with their, well, vote.
Also great work by Alex Tarrant - I always enjoy the way you write and approach these topics. Brilliant.
Pool party analogy - The first home buyers started drowning in 2010-2012, when the pool level suddenly rose with an influx of foreign capital. National observed but preferred to walk over to the BBQ and have a beer with their rich friends saying “I can’t hear the screaming, there’s nothing’s wrong”. But now it’s an election year and oops most of the FHB’s are dead, they’ve been dyeing for the last 7 years. Hey that’s not our fault, they entered the swimming pool when Labour was in power.
A wee bit to go to see them halved.
Sydney has made a strong start to the autumn selling season with a total clearance rate over March of 75.8 per cent. Although this was slightly lower than the 77.4 per cent recorded over February, it was well ahead of the 68.8 per cent recorded over March last year.
Sydney recorded a median auction price of $1,306,000 over March which was higher than the $1,290,000 reported over February and 4.9 per cent higher than the $1,245,000 recorded over March last year.
https://www.domain.com.au/news/calm-before-the-storm-for-hot-sydney-mar…
Watch the media talk down NZ housing...
it has started !!!
The last thing they want is for the circus to stop..... We will see headline after headline to soften any potential policy that may be introduced once National are finally given the boot.
Labour's ban should help boost Consents as Foreign buyers Resident and Non-Resident will only be allowed to buy new builds.
A 15% stamp duty on Investors buying existing properties may also encourage them to build new properties rather than boosting the price on existing. Finally genuinely provide a service to society.
Everyone knows that overseas/foreign buyer data has been manipulated by saying that only foreigners who are over overseas tax payer are foreigners but in reality anyone who does not have a New Zealand Passport is a foreigner and for property can also add Permanent residents (PR) and rest all on student visa or short term visa are foreigners/overseas buyer and was it so hard for National leaders who are the only experienced and experts in NZ (am sure with 9 years in power feel that way) to understand. Did they thought that they will be able take people for the ride but forgot that times have changed and now with social media and internet hard to manipulate even with the help of the media.
National is a party that seriously follow the policy of : Denial, Lie and Manipulation and if nothing works blame all living creatures and environment, mountain, sea but themselves.
Election Year. Vote for Change (must confess that have been national voter in past)
Yes absolutely, property is the main issue and reducing the monopoly on foreign ownership or at least taxing them for the privilege should be the main agenda. And to do that we need accurate ownership figures.
There wouldn't be a housing crisis if all homes were utilized and it's well known that overseas non resident investors tend to leave their property assets empty. Having the figures on Foreign Buyers would also allow us to track how many empty homes they have and tax them accordingly.
IMHO the bigger picture involves removing some financial incentives for landlords while providing greater financial incentives for owner occupiers. (and I say that as an overseas house owner.) The softening in demand from investors would be mitigated by increased demand from owner occupiers. Prices would still decline in real terms though. I see this as an inevitable burden that gen X and Y will ultimately bear. As the home ownership rate declines this outcome becomes more likely and more politically palatable. Selling carrots (ie. financial incentives) is easier than selling sticks (ie. additional taxes) .
As a long term nat voter they really have their head in the sand on this. This is causing massive stress on wages for businesses and driving our educated youth who we should be retaining as tax payers to Aussie.
Voting to stop the property and immigration ponzi, to keep our youth in NZ and to stop swimming in cow piss. #notNational...
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