There were sharp declines in the number of New Zealand residential properties purchased or sold by overseas owners in the first quarter of this year.
The latest figures from Statistics NZ show that just 93 residential properties were purchased by people who were neither NZ citizens or who had residence visas, in the March quarter of this year.
That was less than half the number of overseas buyers who purchased residential properties in the first quarter of last year and less than 10% compared to the first quarter of 2018.
There was also a big drop in the number of residential properties sold by overseas owners in the first quarter of this year, which dropped to 246 from 423 in the first quarter of last year.
However, the number of overseas owners selling their NZ residential properties has outnumbered those buying them by a substantial margin since the first quarter of 2019.
There has been a substantial decline in the number of overseas buyers purchasing NZ residential property since the Overseas Investment Amendment Act, which severely restricts the ability on non-NZ citizens and/or people without a NZ residence visa, to purchase residential property, came into effect in October 2018.
The table below shows the quarterly sales and purchases by overseas buyers and sellers since the first quarter of 2018.
The areas where overseas owners were most active in the 12 months to March this year were Auckland with 201 purchases and 711 sales by overseas owners, followed by Christchurch with 72 purchases and 93 sales and Queenstown-lakes with 63 purchases and 90 sales.
However, the Statistics NZ figures give only a partial view of overseas owner activity because they only record property transfers undertaken by overseas individuals in their own name.
They do not include sales or purchases undertaken by companies or most trusts, even if the ultimate beneficiaries of those entities are non-NZ citizens or residents.
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| Overseas Buyers/Sellers of NZ Residential Properties | ||||
| Quarterly | ||||
| Buyers | Sellers | |||
| Mar-18 | 1,083 | 501 | ||
| Jun-18 | 1,116 | 492 | ||
| Sep-18 | 717 | 378 | ||
| Dec-18 | 885 | 414 | ||
| Mar-19 | 204 | 327 | ||
| Jun-19 | 183 | 327 | ||
| Sep-19 | 186 | 309 | ||
| Dec-19 | 147 | 333 | ||
| Mar-20 | 153 | 324 | ||
| Jun-20 | 105 | 243 | ||
| Sep-20 | 240 | 369 | ||
| Dec-20 | 174 | 438 | ||
| Mar-21 | 192 | 423 | ||
| Jun-21 | 135 | 366 | ||
| Sep-21 | 132 | 354 | ||
| Dec-21 | 174 | 339 | ||
| Mar-22 | 93 | 246 | ||
44 Comments
Another welcome headwind to the property market.
Wow the news gets better for first home buyers. The party is certainly over. Be patient. You might not get the bottom but you will pay less than you would now and you will be borrowing less. Where I live is a regional capital and houses in the entry level bracket are pouring onto the market. And they are not selling easily or quickly. It is a total buyers market here.
The news isnt that great for FHBs, they're facing high lending costs, restrictions to lending, and diminishing incomes due to inflation and coming job losses.
Measuring "affordability" as merely the purchase price is flawed.
It depends on how far they fall. In South Auckland it will be a 6 figure some at least. Your house is only worth what similar houses are selling for in your location. Buckle up. It is going to be rough. They need to wait a good six months at least. As interest rates rise people will be borrowing less. This rates have some way to go upwards.
At the moment, the cost to borrow money is closing in on being 3x higher than it was 12 months or so ago.
I'm not a mathemagician, how much do house values need to fall before your mortgage payments are less?
It's the principle that matters over the life of the loan. Doesn't matter what you got 12 months ago because you may have fixed for what 2-3 years? Paying 5% less now will put you on par with 1 year ago and that 1-3 year gap of a lower rate.
Minus whatever you spent housing yourself over that period.
Exactly what I was going to say.
I expect this will mostly be the top end of the market and will have little immediate impact for the average kiwi FHB, but flow on definitely will. Great news!
... I think its the change in sentiment that's important here ... 4 years ago it was reversed , twice as many buys as sells from foreigners ...
The fat cats'are deserting the sinking ship ...
Jacinda says thank you. You're welcome.
I wonder how many hundreds of millions (or more?) of capital is being extracted from the housing market/economy and going elsewhere? Young local FHB's get the debt burden, and some foreign buyer sells at the peak and takes the capital gain offshore for another economy to use...(hopefully not in their housing market!)
I wonder... what is the breakdown by country that these FB are from. Where does Aust and Singpore fit in as they are not treated as foreign in terms of buying residential property
I know this article is about resi properties though are there any stats about foeign buyers for all of the other types of properties that exist
Overseas speculators fleeing the Ponzi before it implodes. They are the smart ones. Be quick!
Exactly! And of course investors are not going to but into a falling market when they are trying to park their money somewhere safe. They could lose 20% of their investment within a year and have trouble selling to exit
I wonder why the writers of these articles think they have discovered somethign amazing.
You do know Greg that oversease buyers cant actually purchase property in NZ (only Singapore / Ausie).
So it would be an amazing feat for the stats to be anything otherwise as the main buyers / sellers are Chinese and they can only sell and cant buy.
Very very easy for Chinese investor to register a company in Singapore.
Very very easy for Chinese investor to register a company in Singapore.
You got it. Nevertheless, I still suspect the leakage of funds from the mainland is quite difficult at the moment.
The Macau shuffle was a great way out for years, wonder if it's still going on?
You walk into a Casino in Macau. Withdraw a few million in chips using your Chinese bank details... use a one armed bandit a few times. Live it up in a hotel for a bit and gamble a bit more. Go back and cash in your chips... "now where would you like that money deposited Sir? Your Singapore account? Certainly..."
I'm sure there's ways to grease palms.
The capital flight from China during these 2020s is likely going to be next level.
Can't 'overseas buyers' still buy new build properties?
And apartments as well??
New ones
BlueKiwi,
Go back and read the last sentence of the article again. Of course there are overseas buyers using trusts to conceal the buyer's identity.
You obviously know nothing about property transactions and the legal requirements especially with trusts.
When was the last time you bought a property with a trust.
Heard of "source of funds".
Foreign investors/launders can read the tea leaves as well. Why buy in a falling market? That said Queenstown lakes building for foreign owners is still gangbusters. If construction stops half the people living and working in Southern Lakes house will have to move elsewhere.
It's almost as if there's a law
The fall in value of the Kiwi dollar makes it less attractive to hold Kiwi assets. Falling dollar values and falling property prices make it a no brainer to dump and run. Also not as easy to live the endless summer by owning houses in Northern Hemisphere and NZ due to the increased airfares and lockdown risk.
April had more departures than arrivals as well...
15,130 more people left than arrived when I ran the figures a few days ago
In 2021, 9 of 12 months had a net negative month. So far 2022 has been negative 3 of 4 months.
-16k is a pretty large differential though, larger than any other month in 2021 and 2022 YTD.
The outcome of interest rate hikes, slow foreign investments, war, climate change and Inflation alongside other factors are contributions to the foreseeable future of property values in NZ.
If I was sitting in the UK right now, NZ would be looking quite attractive. The war is too close for comfort, fuel prices are through the roof and Brexit is costing them a fortune. This housing dip and immigration drop may be over within 12 months. It could go either way depending on our immigration settings.
If I was taking a punt for NZ:
- economic Pooh's and wees for the next 18 months
- National form government
- Immigration ramps
- housing disencentives partially rolled back
- return to growth 2025
Assumes the world doesn't catch fire before then.
Looks about right to me
Yeah and if the NZD further drops and/or house prices it's potentially going to attract people to NZ, in particular places like the UK where their money will go far?
The NZD isn’t really weakening against the Pound. One pound is still buying less than 2 NZD.
*If* that changes to say 2.5 NZD to the pound and house prices fall 20-30%, then yeah emigrating from the UK to here might start to look like an OK proposition.
Does the "Sell in May..." rule apply to property?
Is it any surprise when prices were allowed to get so high due to the emergency low interest rates.Some people are going to need to sell low. I have seen some houses drop by 10% from previous asking prices and they still are not selling. A lot have been withdrawn too.
Made your hay ?
... sell in May !
Take the money .... and run away ...
Too late
Out the starting gate
Should've sold in Jan
Before the sht hit the fan.
Should've started the marketing campaign in October 2021.
Fitz,
'Tis the Eve(ning) of the bubble
So, can I sell my rental,
before it turns to rubble?
With higher seas
Within our reach,
Soon, my little rental
Will be much closer to the beach.
And perhaps a Russian billionaire,
Would like a little bolthole
nestled close to Bayfair
With apologies to all poets.
Why hurry to catch the falling knife? The party is just getting started. Few more 50bp hikes to go, we need to see max fear!
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