Overseas buyers are quitting their New Zealand residential properties at twice the rate they are buying them, according to the latest figures from Statistics New Zealand.
These show overseas owners (people without NZ citizenship or residency), sold 324 residential properties in the first quarter of this year and bought just 153 over the same period.
The number of sales by overseas owners has exceeded purchases since the first quarter of last year, following the introduction of restrictions on foreign buyers acquiring residential property in this country in late 2018.
Prior to that the reverse was true, with purchases by overseas buyers running at twice the level of sales by overseas owners.
Sales to overseas buyers have declined by 85% over the last two years, with 1038 homes sold to overseas buyers in the first quarter of 2018 compared to just 153 in the first quarter of this year.
Auckland remains the most popular destination for overseas buyers, with the region accounting for 66 of the first quarter sales, with two thirds of those in the Waitemata Ward, which covers the CBD and central suburbs.
The next most popular locations were Otago with 27 sales, of which 15 were in the Queenstown-Lakes District, followed by Canterbury (15 sales) and Wellington and the Waikato which both had 12 sales.
In the 12 months to the end of March overseas buyers purchased 669 New Zealand residential properties and sold 1290.
However the Statistics NZ figures do not give a complete picture of overseas buyer activity in the residential property market because they exclude transactions made through companies and most trust structures, regardless of where the people behind those entities were based.
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105 Comments
Great news.
Totally! Can we speed it up?
Reminiscent of the “Cayman” trusts that were in NZ because NZ , according to Mr Key, wasn’t a tax haven. But funnily enough, were all suddenly gone when NZ actually ceased being a tax haven.
Covid-19 reporting for duty
@Shore Thing ............dont get too excited mate they only sold 324 properties ........... we had over 100,000 immigrants and over 70,00 nett new arrivals in the same period
It shows what some of us already knew , there were relatively few "foreign buyers " in the first place
And in light of the fact we built around 20,000 houses during the same period , its evident the the 300 or so foreign buyers would have had little if any effect on prices of houses
Great - won't make any difference now then that they appear to be leaving the market.
Foreign buyers never had much effect in the first place ............those Asian folk turning up at auctions were more likely to be residents or citizens than foreign buyers ..................unless of course you think everyone who looks Asian at an auction is a "foreign buyer "
Good news again then, meaning the foreign buyer ban wasn't the cause to flat line house prices a few years back. Won't influence us at all then if say the Chinese component choose to sell up when they realise the likelihood of capital gains are gone for now.
It actually wasn't the cause of the flat-line. The market started to flatten out about 6 months before the foreign buyers ban, most likely cause by the more stringent LVR on investors in late 2017. Remember, cause must come before effect.
That was not true in Auckland, though, the 3% was a countrywide figure.
However, yes, the proxy economic policy of enlarging nominal GDP by importing more folk did have its massive effect too. Combined, at one point data were posted on here showing that in a qtr 50% of transactions on the North Shore did not have at least one party on either side of the transaction with NZ citizenship.
In the midst of a local housing shortage and affordability crisis surely selling 1 in every ~30 properties to foreigners was a dumb idea? Wish we could get that down to 0%. I reckon the only people that would disagree are those that have been profiting from selling off our land to foreigners.
Whatever bias I may have, shouldn't auctions represent the demographics of the local population, so if Chinese make up 20% of Auckland's population, isn't it fair to assume this would be the same at an auction 20%. Or are Auckland's auction something special and only people who identify or have a resemblance to Chinese allowed in auctions, why wouldn't other types of NZers go to auctions. This makes no sense to me, especially if the market was sane, and normal buying behaviors were taking place. Unless we are saying that buying practices were not sane.
He didn't allow for one person buying several houses for other offshore interests, and that was well known.
More tired Boomer gaslighting nonsense.
Melb, Syd, Vancouver, Auckland, etc all cooled off simultaneously after China clamped down on capital flight.
And it's not just the foreign buyers themselves, it's the idiot local Boomers loading up on debt to buy at any price based on the belief that local incomes didn't matter anymore because NZ houses would keep being priced higher and higher by foreign money. You don't need a huge percentage of foreign buyers to create that effect, just a few Herald pieces about Chinese buyers paying well over market value and gossip will do the rest.
You don't need many foreign buyers or high wealth buyers to have a tremendous marginal affect on housing or any asset price for that matter. If that marginal buyer never entered the market home prices would not be inflated in major cities around commonwealth nations who all had similar immigration policies. The principle difference of major importance is one consumer can most likely afford the value, hence the marginal buyer, while the other, low wealth domestic consumers, in conjunction with easing monetary policy will be enslaved forever.
A quote..."A marginal buyer is the outlier who pays huge premiums over the consensus price that skilled real estate agents would come up with according to the micro-market and previous sales factors. Although these buyers make up just a small subset of buyers, they actually determine the value of the market"
And yet, there are 200,000 vacant dwellings in NZ, one of the highest per-pop figures in the OECD. Sounds more like issues with domestic investment hording than actually supply.
Sales to foreign buyers down 85% in the last 2 years
House prices reach all-time high in March 2020
So who is buying them? lol
THEMAN2? :D
LOL.. but he bought them all under market value, so it might not be him..
The BGM/Bright Glitter Merchant; govt, councils, ministers, RBNZ, Banks, raft of overpaid CEOs - are all committed to sustain the F.I.RE economy, It's hard to name one of them without any property investment. The only way/when to spot when those prices about to come down? in my view is when.. OZ/NZ banks started to follow Deutche & HSBC banks, Airlines, Tourism, Hospitality sectors.. started to shed their sales/marketing staff.. after all, what else to sell within combined 30mil populations? home loan, insurance, property. Hey, here's an idea.. why don't we tapped into around half of those.. which are still renting?.. eeek, can't afford it - we need to open the Foreign tap .. eeek.
Flawed terms : prices and sales not same thing.
As in prices are 75% up on 2013 and sale are down 35%
Yvil mate, I found an amazing investment opportunity you will be interested in. Look at that trend! https://bespokeinvest.typepad.com/.a/6a00d8349edae969e201053686334d970c…
Great. Well done Labour, at least on this.
Yep, although it didn't stop house prices going up
Falling mortgage rates propping up property prices don't you get it Yvil. Still Auckland's prices have stagnated since the foreign buyers ban and still not gone over their 2017 peak prices which demonstrates quite well the impact foreign buyers had on the market by massively over bloating it.
"Auckland's prices have stagnated since the foreign buyers ban and still not gone over their 2017 peak prices "
That's not true, they reached an all-time high last month (still over 20 thumbs up shows how ignorant most posters are), unbelievable
LOL well I'm looking at my Auckland home estimate on Homes.co.nz and it's still lower then my 2017 rateable value.
Well that's your problem CJ099 if your house hasn't kept up with the rise of most houses in NZ. FYI, your house value doesn't not make the overall market in NZ which is at record high in March by, HPI, Averge price and median price
Why do you assume rising house prices are a good thing for home owners or the country as a whole? I find this view very negative / pessimistic. Those that cheer-lead housing costs rising faster than inflation and wages are doom and gloom merchants to my mind.
bit sensitive?
So by your logic "Falling mortgage rates propping up property prices don't you get it Yvil." house prices are going to keep rising since the OCR was slashed by 0.75% recentl, right?
Pretty sure everyone is aware that there is now a conspicuously large other factor in play.
But yes, it was impressive how much central bank support was needed to keep prices from going backward. Even your predictions were based on having a 0.5% drop from the central bank to help.
Well not necessarily Yavil, seems that both the banks and our Government are having to prop up business now (part of the real economy), rather than endless credit for property (false economy). There may be not much wiggle room left for lowering mortgages rates even further to help push up prices. :)
Correct. But it's very likely it limited the rise, potentially significantly.
I was just thinkng, with the likely declines this year, it will be likely that prices have not increased at all in the last 4 years by 2021....
"But it's very likely it limited the rise, potentially significantly."
We have banned the Chinese buyers, so all we need now do is to ban the Chinese virus. I heard yesterday the Aussies have a possible vaccination-protein that produces the antibodies needed and is therefore a lot safer. If so it drastically cuts down the time to bring to market.
Widespread vaccinations (meaning widespread *globally*) is still 1-3 years away. Although the CCP could come up with some convenient lie such as "we have now vaccinated every Chinese citizen" to speed things up.
Read this first
https://www.dailymail.co.uk/news/article-8266729/Australian-researchers…
And then tell me if what you said is true
They'll start human trials in June. Such trials usually take several months (6-12). Then it takes months to ramp up production. Then it takes a year or two to produce 2 billion or so doses.
Now think about it again, and then tell me if what I said earlier was correct or not.
Yip, specially in Q/town right now.. the same remark should be applied for incoming months ahead. Bravo to all BGMs, 'keep plastering reality'.
Foreign purchasing stats were never categorised by nationality. yet, the use of headline picture is always biasd against Asians or Chinese specifically.
I guess in NZ as long as one looks like a Caucasian he will be regard as NZer immediately while all others with non caucasian appearance are not regarded as NZers even if they have been living in NZ for five gens.
Pathetic.
and poor use of such pics with strong bias messages.
Indeed, racism is still very real in NZ
NZ, the land of the wrong white crowd..
As Winston's said.. Two W.... doesn't make W..... - C'mon Ed. as born/raise as non-anglo saxon, I'm enjoying diversity, laugh at our own ethnicity.
This 'touchy remarks' kind of over the top, it's all about assertion of racial supremacy.. Chinese always put others in the band of Xenophobes, here in OZ/NZ.. but they never uttered such remarks around ASEAN countries.
What does that even mean “land of the wrong white crowd"? Are you saying you would prefer the French or the Spanish? Can you flesh it out a bit more?
Have anyone of you guys been to China? You don't know what racism is until you go there..
Exactly right. But it’s trendy to blame all sorts of problems of any magnitude on white people and a bunch of dudes that colonised NZ 250 years ago whilst branding them racist.
No one is saying you are racist, it's more the "system" is heavily anglo-saxon biased and that generally suits pakeha more. Pacifica and Maori youth are responding well to mentoring and more academic assistance. Ironically, many commentators here seem to want to move away from monetary capitalism and towards the Maori values of sustainability, protecting resources for future generations. Something to think about.
Best not to confuse modern understanding of sustainability with subsistence living/farming. All cultures have lived this way at some point in history. The notion of sustainability is very recent, however it’s possible conceptually some people lived in a sustainable way but were never self sustaining. Moa and the Haast Eagle?
I wasn't referring to the "old ways", we all came from subsistence living at some point or other. I'm referring to protecting resources for future generations, not hand to mouth living. Recreational fishing and hunting in our rohe is actively managed, if stocks are low there is a rahui.
The woman with her back to us in the photo - don't marry him. Your children will have knobbly elbows
What a racist joke by Chairman Moa. Change 'white' for any other colour or type of person and is that comment acceptable? Racist or discriminatory comments against any category of person are morally wrong. The sooner we start thinking of New Zealanders as all part of the same family the better. Included in that is also wanting all members of the family to be included, strong and successful. Support and help for those that need it in our family should also be based on need, not based category of person or shade of colour. Dividing ourselves into 'types of people' angry at other 'types of people' won't end well for any of us.
Yes racism exists and it is dumb. However in NZ with my visibly immigrant family and mixing with many immigrants of various origins I generally find it is rather non-consequential most of the time; stupid rather than evil. We have none of the race riots and the ghettos I left behind in Europe. Kiwis are well travelled and open-minded on the whole - keep numbers reasonable, make an effort to avoid an immigrant underclass and treat everyone as Kiwi first and foremost. Or as the academics say: social cohesion.
Rare for me but I 100% totally agree with you.
I bought my home in Auckland when I was a British citizen with only NZ residency - I have had no backlash and no 'go back to where you came from' (although some might think it). Sadly once I asked a man where he came from and he said he was Samoan - as we chatted I discovered he was born in NZ and had lived all his life in NZ and had 7 childen in NZ. He was a Kiwi of Samoan heritage whereas I was a Kiwi by citizenship ceremony. He thought I was a Kiwi.
Can I buy a house in China?
No.
Following your logic the Chinese must be racist.
Sorry Fritz, it's racist for you to point that out. -10 social credits, please report for re-education.
A nice comfortable facility in Xinjiang...I mean East Turkestan...awaits him
Agreed, you should reported to human rights commission, we should never used the words, Chinese Restaurant, Chinese Herbal, Chinese taki awai, Spanish Flu... etc. - Anything depicted is deemed to be racist bias towards individual ethnicity, don't go back home comrade. Let's vote for the blue team, they'll open the border soon for specific GDP donation to come into propping up F.I.RE economy - spread the love making messages this is the year to do it, the year of pest/rat means just that one side have to breed gaining majority voting numbers, the other side would be taken care by RNA bugs grade by products, after all? they're the most likely to vote in rejecting CullenCGT & turned into slumlords.
"the use of headline picture is always biasd against Asians or Chinese specifically" - What? Are you implying those in the picture are Chinese? How do you know they're not just ordinary kiwis? Do they have Chinese-sounding names perhaps?
China doesn't allow any non Chinese to become a national unless you pass a nationality test (speak Putonghua) and give up your foreign passport.
In Hong Kong a perm resident is not allowed to apply for a passport irrespective of how long they have lived in the territory unless they are Chinese.
Maybe we should have the same rules until the playing field is leveled up ?
Amen to that. If Their Govt and way of life is so awesome why are they trying to buy up the pacific rim and export themselves so bad? Could a land that is now polluted, society so corrupt, and a govt that has sacrificed an entire generations health, limited its ability to have the joy of children just to suit its own political agenda have anything to do with it.
To quote Sir Ian "Go back to the Shadow".
Not just NZ, this is the latest from across the ditch. When this farm was sold, it was big news, now he's offloading it.
https://www.abc.net.au/news/rural/2020-05-01/queensland-mcmillan-family…
The numbers are next to useless as there are too many loopholes (companies & trust structures) as per usual. It's a tough gig believing anything you read these days.
Bang on. Until they report trusts where the settlor is a foreign national the reporting isnt really of any use at all.
Foreign Buyers, is never been the issue as stat showing by the blue team. To recover economy from Covid-19 the govt, banks & central bank - all went ahead to remove all prudent measures for responsible lending, neglected infrastructures, healthcare only being attended as lip service, govt. entice the banks to lend not for research, any new creative business startup to cater the unemployment.. but for property loans, F.I.RE economy. Most of those bank savers don't ask for handout, but majority of property investors ask for one.
Despite their 'stellar performance of investment category' the past 10yrs, benefit increases? wages subsidy? - all being sucked up straight away to these 'property investor'
https://www.stuff.co.nz/life-style/homed/renting/121325211/tenants-goin…
The Blue team said it was only 3%
Surely in the midst of a local housing shortage and affordability crisis selling 1 in every ~30 properties to wealthy foreigners was a dumb idea? I reckon the only people that would disagree are those that have been profiting from selling off our land to foreigners.
Foreign buyers selling to NZ FHB at the end of the cycle. Great result for the foreign buyer, terrible result for the future of NZ.
Wonder how many billions of dollars of tax free capital gains they've extracted from NZ?
It all depends on when they bought. Factoring in the exchange rate, one would have needed to have bought more than six years ago to have made a profit... This is dependent on which country you are repatriating to, some countries have more favorable long term trends than other countries. For most other countries, the present is a rather poor time to be selling an NZ asset and repatriating the proceeds. That said, the NZD has improved by around 10% compared to most other countries in the past month. This improved NZD may result in a second wave of overseas selling.
If I was an overseas owner and NZ property is heading where it's going I would sell/have sold as well. Add in the new normal of cant visit with borders closed, no ABnB market, students scam closed down, exchange rate drop, and prices being picked by all banks to plummet. Wheres the upside?
The upside, if you are a wealthy resident of a large NH city, is NZ is your plan B if and when things get really bad.
If I was in London or NY I'd have a place in Waiheke or Coromandel as my DR. That's a no brainer. There are a handful of English speaking, common law countries with a temperate climate and water/power independence.
We seriously need a land tax on non NZ resident tax payers. 10% per year should do it.
Start at 1% and increase if required. Make it non-citizens. There should be no complaints because that 1% tax helps pay for the overheads of having a country operating under the rule of law that defends their ownership. Fair go.
So if more foreign owners have been selling their properties, and if we assume that they weren't in the bottom quartile or even half of the price range, ( not an unreasonable assumption, especially if the likes of Queenstown showed a marked increase in sales) then any set of statistics will show a rise in median, mean or even modal prices achieved.
Transaction done through companies and trust......Loophole used by most foreign buyers using their friends and relatives in NZ to launder money.
... If a trust is majority held by foreigners, it still comes under Overseas Investment. Same for any company more than 24% owened by foreigners. Also, some may use a friend or relative, but that property still can't be transferred to the foreign owner. I can assure you, most people with money would not dump it into an asset that could never legally be theirs.
Stop being so ignorant and assuming false truths about the world.
See ‘ya’. Shut the door on your way out. New Zealand houses for New Zealanders. Period.
Liked the remark, but the truth remains: Both ruling elites of Neoliberal in OZ & NZ were cozy-ed up by $ incoming into their F.I.RE economy belief via their own local banks. It's very difficult to dismantle this structure, but it can be done.
https://www.youtube.com/watch?v=MGrBCtOt4Qs
Minus the fact that Australians are still the single largest foreign ownership group, and are still exempt from the ban.
Apart from the obvious omission of companies and trusts, these figures also don't show those buyers who've had their "permanent residency" fast tracked so they can buy property. Done by parking 10 million here for three years. That and spend a whopping 88 days here, and you're good to go.
https://www.immigration.govt.nz/new-zealand-visas/apply-for-a-visa/abou…
It should be giving to IRD $10m. Parking money here while we have higher than other country interest rates is just selling citizenship very cheap. There are caribbean countries that charge double that.
It would be interesting if the driving narrative from the boomer cohort goes from 'I'm going to preserve my capital by parking it in property' to 'I may lose capital I need for retirement by holding onto my investment property/ies, I'm going to preserve my capital by parking it in deposits and ride this storm out'.
Or 'I'm going to downsize my house now and get settled in for retirement. No longer need the 4 beddy, 2 bathroom for retirement, a 2 bedroom home will be fine to preseve capital and free up some cash for consumption now that yields on low risk investments is so low (e.g. cash, TD's, bonds)'.
I would like a lot more detail because I thought that the only sales to overseas people was supposed to be to either Australians and people from Singapore, or newly built apartments to anyone. Key point, I would like to know how many stand alone properties are being sold to people who are not from NZ, Australia or Singapore. If there are any why are these sales being allowed and why is this OK given our laws to the contrary. If they are occurring via loop holes what is the government doing change this and if not, why not.
What's going on with the comments section on this site?
Whole sections seem to be removed with no explanation.
Do believe the tacit censor is at work here. Undesirable comment to be removed without explanation. Makes sense. Causes the perpetrators(s) to think about not only what they have said, but also what they might have said. I too have been guilty as such and met the same deserved fate. Suspect if the original post is removed those replies attached to it disappear too. Much easier on the Ed and as often, a subtle, as opposed to blunt, message can work wonders
Yes that's what happened.
Bit like when my parents sent me to my room as a kid. I could only come out when I could tell them what I had done wrong.
My post mentioned the CCP in jest. This site isn’t under new ownership is it?
Gee I hope not, that sort of thing is why I stopped reading Stuff.
I made a joke about the CCP the other day and got a rather strongly worded final warning. No longer feel comfortable.
Thanks Timmy. You know that is actually quite astounding in its simplicity and value. Why the heck didn’t my parents think of it and in turn why didn’t I. Bit old in the tooth now but never too late to learn something new.
PFFFFF!
DO ME A FAVOUR ........... a PIDDLY 324 FOREIGNERS BOUGHT OUR HOUSES !
WTF ?
Thats hardly enough to move a market where we build around 20,000 to 30,000 new houses a year and buy or sell a few tens of thousands more .
Quite right.
The amount they buy is so small it won't matter if they are kept out of the local market ad infinitum.
After all, New Zealanders aren't allowed to buy a piddly few houses in many of their markets, either.
A more relevant statistic to the property market in NZ is that 8% of households in NZ owe approximately 40% of household debt.
Those 324 would be mostly in AKL and it’s the buyer at the margin that resets the price for a given street, area or city it’s very significant.
Another aspect quite rightly pointed out before is the fact many foreigner buyers are not being counted technically as foreign buyers under the definition with many other avenues available to use for circumventing.
Trusts about 14% of all dwellings in Auckland according to census (59% owned)
Companies purchasing difficult to know but I have seen best that it is up to 15% of purchases in Auckland.
Mike, how is the selling going since we have gone to level 3?
Have you been doing a few appraisals and sold a few?
"Mike, how is the selling going since we have gone to level 3?
Have you been doing a few appraisals and sold a few?"
Totally irrelevant response to Mike's statistics.
The reason that these types of backhanded personal attacks are made is due to the commenter's inability to logically rebut the statistics. That behaviour says more about the commenter who made the backhanded personal attacks.
CN, what a silly comment.
I was asking how the real estate market was going for Mike Kirk, our resident real estate agent, as with him selling real estate, he should be able to advise us all on how the market is over the past few days!
If that is the case, then my mistake, and my apologies to you then.
Since this same comment was been made previously to Mike, I interpreted the comment as a bankhanded jibe. I think Mike made the same interpretation.
No need to apologise on here at all!
Yes I did question Mike about whether he was still a practicing real estate salesperson awhile ago.
If Mike thinks that he is and he is making a living out of real estate, then good on him!
He must be doing something with real estate or he wouldn’t still be saying that he was a salesperson would he??
Problem for me is that he never has an listings advertised on any of the real estate websites, which I find extremely hard to fathom?
Maybe he sells them before he has a chance to advertise them???.
It is deeply shameful that the rhetoric around the foreign buyer ban became so racist, when the reality was that our country was for sale to the highest bidder – 'having the most money' is not a nationality. The public should have been mad at the 1% all along. I feel sad for our fellow kiwis who have experienced racism amongst all this.
Straw man virtue signal combo. Nice!
So foreign buyers are leaving... https://www.youtube.com/watch?v=xi_3v-FpKFg
I thought that the new law banned foreign buyers other than Australians and Singaporeans. See https://www.scoop.co.nz/stories/PA1808/S00172/foreign-buyers-ban-passes…
Why are the "banned" foreign home buyer numbers increasing and are about 300 a quarter? See https://www.stats.govt.nz/assets/Uploads/Property-transfer-statistics/P…
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