By Bernard Hickey
Economic Development Minister Steven Joyce has revealed the Government plans to collate and publish data on non-resident buyers of rental properties after it starts being collected from October 1.
Joyce criticised the release of data by Labour over weekend showing people with Chinese names bought 39.5% of houses through one estate agency chain in Auckland from February to April, saying data showing the actual levels and nationality of foreign buyers was going to be released anyway.
"Labour knows the data is being collected from the 1st of October and yet they have now chosen to go and pick on people with Chinese sounding surnames in the sure knowledge that in a few months time we'll start getting actual data," Joyce told Morning Report.
The Government announced new rules in the Budget which will force buyers of investment properties, both resident and non-resident, to declare their IRD numbers to LINZ. Non-residents will also have to open bank accounts here, obtain New Zealand IRD numbers and declare their home country tax details.
"The real information will be collected from the 1st of October and it will undoubtedly be released," Joyce said, adding it would be not be itemised by surname, but would show which countries the non-residents were buying from.
Asked if the Government would act to restrict non-resident buyers if the data showed it was a significant driver of Auckland house prices, Joyce said the Government "would deal with that at the time, but we wouldn't be going around and saying that your surname, which is same surname whether you've been here for 100 years or a year, will determine the way people feel about you buying houses, which is what the Labour Party is doing."
"I actually think they'll pay for it electorally from ethnic communities, not just Chinese communities, around New Zealand for years and years into the future."
Labour calls for full register
Labour Leader Andrew Little said the Government should set up a full foreign buyer's register. Little said Joyce was being 'cute' by saying the data on investment properties would be collected from October 1.
“From that date all house buyers will have to have a New Zealand IRD number. That is not the same as a foreign buyers register because there is no guarantee the information will be available in a way that allows public scrutiny," Little said.
“A register would provide a searchable and up-to-date database which would inform the market and public debate. Without one, the Government will simply pick and choose data to support its false claim foreign speculators only account for 1 per cent of all house sales," he said.
“The Government must also assure New Zealanders non-resident foreign buyers purchasing properties through companies or trusts will be required to disclose overseas interest in accordance with the Overseas Investment Act which has a 25 per cent threshold," he said.
“Kiwi families who are struggling to buy their own home want to know the impact offshore speculators are having on skyrocketing Auckland house prices. They are sick and tired of losing homes at auction to higher bidders down the end of a telephone line in another country."
Labour criticises Devoy
Meanwhile, Labour continued its attack, criticising Race Relations Commissioner Susan Devoy for intervening in the debate.
Devoy criticised Labour Housing Spokesman Phil Twyford for releasing "half baked" data and blaming Chinese New Zealanders for house price inflation.
"Dumbing down complex economic woes and blaming them on an ethnic community whose members are already feeling under pressure is neither new nor unique but it's always disappointing," Devoy said.
Labour's Shadow Attorney General, David Parker, said Devoy's comments were wrong and would undermine her role.
"She should re-read the Human Rights Act because there is nothing in the Act that says contentious issues ought not to be discussed," Parker said.
“There is nothing racist in what has been said. Labour’s policy is that if you have the right to live here you have the right to buy here, whatever your ethnicity," he said.
“I am surprised Ms Devoy has not commented that it is outrageous that the Herald article showed that Maori and Pasifika are grossly under represented as house buyers, house sellers and agents. Surely this level of social exclusion is bad for race relations.”
(Updated with Little's call for a full foreign buyer's register)
102 Comments
http://www.nzherald.co.nz/property/news/article.cfm?c_id=8&objectid=114…
Mr Law said four out of 10 of the 350 who bought real estate through the company last year were of Chinese ethnicity.
"But what we found from our sales record was less than 10 per cent of them are actually overseas-based investors," he said. "Most of them are citizens or residents who have lived here for years."
OK, so if there are not many non-residents buying property then there will not be many who will be upset by a ban then :)
I was at an open day recently and was talking to a young Chinese woman (early 20s).She was looking to buy investments here on behalf of her uncle in China. She had already bought one and was looking at another 2 or 3 to buy immediately.
This must be going on all the time.
Tax it (capital) extremely heavily (say, 80-100% of purchase price) on the way in (at the time of purchase, that's what a foreign purchase stamp duty does). No need for a ban, but it will make the offshore investors far more price sensitive and locals can finally compete (as they are not subject to the same tax) - and, most importantly, New Zealand gets the benefit of a wonderful source of new tax revenue.
What's not to like?
Make no mistake
The government has exact information - a phone call away
From Peter Thompson - The Nats goto man and major donor
The lobbyist - you want something done - he's the man - that's how politics work
In his own words - Barfoot & Thompson director Peter Thompson said
He lobbies politicians, the Reserve Bank and Real Estate Institute industry leaders
read it all here - NZ Herald - 15 May 2015
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=114…
Devoy completely missed the point and came out with the cliche, Devoy doesn't care that wealthy foreign speculators are driving up prices in key areas of employment, so less wealthy people earning local incomes and contributing to NZ economy are forced to compete and over borrow further increasing NZ massive overseas debt, putting families under pressure or living in sub standard conditions. Locals have deposit restriction and the dollar value is dropping in favor of foreign investors.
One has to question why the Government are so slow/glacial at sorting out affordable housing for locals?
im sure the phone was running hot from hawaii it is interesting to see some of the players coming out to call labour racist and when you follow the links they all lead back to the national party, even the chinese editor David Soh
try goggle david soh and whaleoil very interesting
this is why I object to non kiwis buying nz property and not living here because we are at a disadvantage and they don't contribute in any way to NZ.
http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11478…
my questions are
since the house is positively geared are you paying tax on the income?
have you a NZ IRD number and file a tax return?
you say work harder save more what percentage of your wage in china goes to government tax compared to what kiwis pay.
What are your wages and living expenses compared to NZ?
how did you get 500K out of china and into NZ?
is the money legally obtained was it checked here as per the anti laundering laws?
what is your objective GC?
if GC will you pay tax when you sell and take the money out of NZ?
and my last question is why is IRD not catching this
these are some of my questions im sure I would be happy too if I could invest somewhere tax free and suck income out of that country before I walked away with the GC
whilst the local government looks the other way telling the local population nothing to see here
My house was unoccupied on Census day. I was away visiting my daughter and her family.
There were 514,100 households in Auckland then. If 22,000 were unoccupied, that is 4%. If people get 4 weeks vacation a year and travel for two weeks away from home, that is also 4% of their time they are not at home.
I doubt the 22,000 "unoccupied" is available for renting.
I commented based upon The Metro:
Running on Empty
By Joanna Wane @JoannaWane • On April 16, 2015
In Auckland, more than 33,000 houses were registered as unoccupied in the most recent data from 2013. A breakdown shows about a third had residents away. The remaining 22,152 properties are listed as empty.
Census workers are given clear criteria on the various definitions of an “unoccupied” house and need evidence no one lives there (the appearance of the property, talking to neighbours) before it’s officially classified.
22,152 empty.
I just did a count up of what we have got unoccupied right now today.
The total was 28 houses and flats.
Before I get lambasted, I will add that EQC and insurers are the cause of a few, that quite a number are insurance write offs, a few are getting repairs done, a few are between tenants, a few are past it.
I assume that if a form is not delivered to an address (or collected from one) that the dwelling is recorded as unoccuppied. I note that the dwelling census form does not ask if the property is unoccupied, but does ask to list the number of usual residents.
A normally unoccupied dwelling would not have a census form filled in at all. Would a "homeowner away" dwelling have been required to fill in the census form?
David Chaston can answer that since he has experience. Did you fill in a dwelling form for your home while you were away from it on census night?
Final release from Stats for 2013
http://www.stats.govt.nz/Census/2013-census/profile-and-summary-reports…
Chinese do not bring bags of NZD to NZ. Not do they walk away with bags of NZD.
I agree to some extent with your sentiment, but I would think that framing foreign investors and Chinese investors is reactionary at best. Why is asking Chinese about what tax they pay in China a relevant question? That's none of your's and the bovt's business.
You may be right. But after 1/10/15 the NZ Government will be in a position to send a list of all property transactions performed by non residents back to the domicile of those buyers, with that foreign country left to decide who did or did not pay local taxes etc in their system. The report that goes to the PROC might go to investigations@foxhunt.cn for instance......
that question was in his response his statement that kiwis are lazy savers, how do you know that if you cant compare apples with apples.
if a kiwi payes x amount to the governement and has less disposable income than people from other countries not just china with which to save how does that make him lazy?
it doesnt it makes him disadvantged to be living here and trying to buy here competing against an overseas buyer who not only could have a higher wage, less tax to pay and an exchange rate in his favour
Could drive a truck through all this - 3 different meanings
Headline
Government will collate and publish data on where foreign buyers are coming from
First paragraph
Government plans to collate and publish data on non-resident buyers of "rental properties" (only)
What if they don't rent them out? Hold them empty
Body of article
New rules in the Budget will force buyers of "investment properties", both resident and non-resident
In a years time Steven Joyce will say "I never said that" and never said when either
Can you please clarify
Don McKinnon (another ex Nat China lapdog) has come out and said we shouldn't be discussing this; China might get upset!
Look Don, we don't need or want foreign nationals buying up vast tracts of housing and shutting out our young famillies - if they can't understand that then they really are unworthy "partners" as you choose to call them. Australia, Hong Kong, Canada and Singapore have acted to restrain this influx.
Does it really matter what they think or are we no longer a sovereign nation?
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=114…
The bottom line is, irrespective of the Government's position is that the general public of NZ are very, very concerned about this, and if the Government do not act, then they are opening the door to an opposition party ruling after the next election. This issue has been going on for over 10 years and successive Governments have denied and ignored it. The murmour is now a scream, and platitudes will not appease the masses. The polllies need to understand they work for the people of NZ, not large corporations, banks or foreign Governments. They work for the people, and every three years we get to review their employment contract!
Things could get really ugly if government carry on sticking their fingers in their ears and pretending this doesn't exist. We've got a lot of unemployed and disenfranchised young NZers, and if they get to the point of feeling there's nothing to lose, then it'll go to burning crosses and white hoods territory. And it isn't the overseas money-launderers who will bear the brunt of that. It'll be innocent, but easily identified, citizens being targeted for their ethnicity. How long before the dude who's just living his life and running a takeaway gets a brick through the window, or a firebombing?
as i have said before labour might not win the next election but national could lose the right to govern especially when you have NZ first, labour and the greens all having the same policy of banning foreign existing residential ownership which public sentiment is right behind and national all by themselves for it.
this could be the issue that swings enough votes away from them so why would they bother to fight a losing battle that could lose them the war rather than lose one battle and when the war
Auckland real estate firm Barfoot & Thompson’s internal probe to winkle out the leaker of sales data about Chinese buyers is about more than staff loyalty.
Co-owner Peter Thompson is concerned it may have potential to undermine the trust people have when they list their properties for sale.
A memo he sent to staff yesterday about the matter has already found its way around Auckland property circles.
Speculation from other agency contacts suggests the leaker is a disaffected staff member with either an axe to grind – or a social conscience.
“We’ll have to talk to lawyers. If there is someone who has leaked our data they’ll be spoken to,” Mr Thompson says.
Barfoot & Thompson has a large number of agents of Chinese descent, with a majority making up the firm’s top performers.
Mr Thompson says the same problem of rising house prices and overseas investors was apparent to him when he visited Melbourne and Sydney last week.
Rules requiring foreigners to buy only new homes has done little if anything to resolve it, he says.
People would always find ways to get around rules anyway, he says.
However, the industry prefers a steady market rather than volatility.
A hiatus occurred last year during the election campaign compared with the current busy phase. But a local or international event could see that change in weeks.
The industry has been working on a way to measure the extent of overseas purchasing of houses in Auckland but any system has shortcomings, Mr Thompson says.
However, the industry prefers a steady market rather than booms and busts.
Yes.
A not so tacit admission that the business being conducted does not stand up to scrutiny....greed greed greed.
.
How much longer will we let this go on? Will we defend globalisation? Off shoring of our jobs, and flogging off the country to the highest bidder?
.
Foreign buying of NZ property is not exactly new news
http://www.westpac.co.nz/rednews/property/auckland-the-international-ci…
It has generally been a positive business story for RE agents, banks, sellers etc....
The case for action - and why I think Auckland.Inc is now TBTF - too big to fail
In one way, Auckland property prices are at the mercy of not just global events, but economic events inside China. The problem the NZ government faces is what if there was a China-centric-GFC and property prices in Sydney, Melbourne, and Auckland tanked by (50% for arguments sake) and off-shore buying dried up overnight
Most of the recent cashed up migrants who have purchased Auckland property with 100% equity would be OK and probably able to ride out the storm for any number of years. It would hurt sure, but they wouldnt be tipped into mortgagee sales or foreclosed
However, people with less than 30% equity would be seriously under water and at the mercy of the banks. The banks would be stressed and have to turn to the Government to bail them out in order to evergreen the local home-owners and investors who were underwater. The government would have to be involved right up to its armpits with OBR's, welfare assistance packages, you name it
That then becomes a problem for the whole of society
That's the risk. And the pain and suffering and the screams would become all consuming. When 10,000's of ex-homeowners were walking the streets looking for the government to help them out, the accusation would be why didn't you see this coming, why didn't you cauterize it before it became a problem
It should never have been left to run for so long
Perhaps, from the Government's point of view, every house sold to an offshore buyer is no more than further income for the country. How many NZ businesses bring in $1mn a year from offshore? There are apparently plenty of houses able to bring in comparable amounts, and plenty of willing sellers. So the city of Auckland operates just like a larger SkyCity, staffed by resident croupiers, in the business of fleecing foreigners and each other. Presumably the money banked by sellers is spent somewhere in the national economy. And the regional casino certainly provides employment too. A month or so ago Barfoot & Thompson were bragging in the Weekend Herald that they had 400 Chinese-born salespeople (quoted in a story on the front of the commercial property section). The real question isn't where the offshore buyers hail from, it's how else NZ is going to find the money to fund current 'growth' models. The Government and plenty of Aucklanders seem happy with the real estate casino model. Rivers of gold instead of rivers of fertiliser and effluent. Who cares that our children won't be able to live in the city? They won't be able to swim in the lakes either. But we will have 'growth'.
Maybe that is their perspective, however what will their position be when those FHBs try to sell the houses and take the proceeds off shore? If they are selling to another FHB, no money will rest in NZ, if thy sell to a resident or kiwi, then the flood of money leaving the country has A BIG chunk more added to it?
Is this at all retrospective?
Given what damage has been done over the past 3 years (or so) surely a back-dated approach into foreign buying would be far more informative/somewhat more important than what the government is planning to do as of Oct 1st under the new rules/regulations?!
I was low income and well able to buy a house at age 24. A generation later because of events outside of New Zealand young people in Auckland are excluded from that. And all the rest. It is a social disaster that will reverberate for decades. If the Government continues to ignore it they will not get this old right wingers vote in 2017.
As for John Keys legacy. It might be this disaster he is remembered for.
Housing is the fabric of nz society - shelter, four walls, a roof over our heads
everyone needs it - it's a necessity
Yet, I have been surprised at the silence of the finger waggers, social services, social workers action groups, psychologists, doctors, educators, Red Cross, Salvation Army
Where are they? Is everything ok? Should we all sleep easy tonight?
The Salvation Army has been raising awareness about the housing crisis since 2012, including making a submission to the Productivity Commission.
"By best estimates the city is about 10,000 houses shy of what it needs and it's only likely to worsen. According to the Salvation Army, under current trends over the next 20 years Auckland will be short of 90,000 houses - more houses than were destroyed in the Christchurch earthquake. "
http://www.stuff.co.nz/auckland/local-news/7844917/Auckland-in-grip-of-…
I am a psychiatric nurse who has been wagging his finger for a while.
I have had published articles about housing, infrastructure and poverty since 2013 and a parliamentary submission in 2007.
Brendon Harre wonders what the global collapse in interest rates and the spectre of deflation tell us
http://www.interest.co.nz/opinion/74229/brendon-harre-wonders-what-glob…
Friday's Top 10: Brendon Harré on National vs Labour on housing affordability, UK councils' spy planes, Christchurch rents, Canterbury's leap frog sprawl
http://www.interest.co.nz/opinion/70493/fridays-top-10-brendon-harr%C3%…
Housing crisis: We need new towns
http://www.stuff.co.nz/stuff-nation/assignments/how-can-we-get-more-kiw…
Brendon Harre thinks we have a problem with the poor quality and inadequate quantity of local infrastructure
http://www.interest.co.nz/opinion/65197/brendon-harre-thinks-we-have-pr…
Opinion: Brendon Harre looks at the impact of housing affordability on poverty and wonders why local authorities aren't more concerned
http://www.interest.co.nz/property/62883/opinion-brendon-harre-looks-im…
Unaffordable housing is caused by artificial land restrictions
http://www.parliament.nz/resource/en-nz/48SCCOSCevidencefA2059_A1623/cb…
I have had several articles that are more partisan i.e. critical of John Key not accepted for publication.
what puzzles me...we seem to have a pretty reasonable consensus here, all your points (while I might not agree precisely with your reasoning) are totally valid and sound. But how do we get it _off_ forum and into the real world?
(I note that my own comments on my personal gain on my house sale, "Lets change the law then" on site here, we saw the law change about two days latter. LOL. obviously I wasn't the causative agent there.)
But where to next.
Everyone *I* know recognises the problem and has an idea about the change.
Same with the TPPA - everyone (extra Fonterra and government) that I know says "hell no".
But what next??
Comments here will influence journalists to write certain articles, and will make other readers think.
As you said a law changed, by some influence with a similar view to yours.
Just got to get people talking about it.
Otherwise we could do a risk assessment, of manning the barricades.
I just can not get over the holy "well I pulled myself out of poverty so you should be able to as well' attitude of some in parliament
as one of many for me it was not only hard work and some choices and a little bit of luck at being in the right place at the right time.
but also being around in a time when you didn't have to start out with a huge debt which if I had I would not have got to where I am now.
it will be interesting if we just hand it over or their spies and hackers just take it from us,
does make you wonder why this government is so reluctant to compile it and if they can see it will upset a few of their powerful members and lobbyists if they are being found to be helping those wanted by foxhunt
I don't care what ethnicity the buyers are. NZ houses should be for NZers in my opinion. We pay taxes, and warm dry shelter is one of the necessities of life. Overseas buyers shouldn't be allowed to buy existing housing stock, they should be made to build new homes instead. This would solve the two problems, now enough houses being built, and overseas buyers buying existing housing stock. This is exactly what they do in some states in Oz. The problem is building new houses, at least decent ones, is so expensive, and a lot of our existing housing stock i made from better materials and more craftsmanship, than the new stuff.
Fran O'Sullivan advises Joyce to take another look at foreign ownership
http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11…
I noticed her change about six months ago on Q&A from a key cheerleader to questioning the decisions and the rational behind them.
I am sure with a bit of digging she can get an idea on some scale of what we all know is happening.
gees all she has to do is go to a few auctions and talk to people there,
or have a chat with some RE agents that are not tied up with the Chinese trade they are out there.
or try some mortgage brokers
not everyone is involved with selling properties to foreign investors but quite a few in the industry know who they are and a rough idea of their trades.
So why are we waiting until then? why all this continued secrecy and attempts at hiding the facts about how many overseas buyers there are?
The only conclusion is a continued effort to save face for the government and their point blank refusal to do anything about it.
This isn't something that should be the big secret this government have made it into, no one other than the government themselves have made this a big secret.
The jungle drums beat louder
Excellent article from Fran O'Sullivan in NZ Herald in response to Steven Joyce
Under the legislation all non-residents trading residential property other than their main home have to provide a NZ Bank Account PLUS an IRD number PLUS a Tax Identification Number (TIN) from their home country as well as their passport
Why wait till October ?... Joyce could ask government officials to run a filter over the data in the Auckland Council's roll of residential properties sales over the last two years and determine how many of the buyers had offshore names and addresses and how much they paid for properties over the registered valuations at the time of purchase.
She goes on to say the data register collection should or will be restrospective
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=114…
Has NZ not always been a fascist state?
There was a brief glimmer of hope in the 1980's but we have gone well off track as the brainwashed gave up their ancient birth rights in favour of Nanny State......and Nanny is highly promiscuous getting into bed with anyone......the severe defects of breaching ancient rights affect socialism, communism, capitalism, tribalism etc
Governments respond to public opinion. The vitriol and mocking of Don McKinnon's comment on perceived (and actual) China-bashing is instructive. Governments don't form public opinion, they follow it. Even befire the govt-sourced data on foreign ownership is out, they will be forming a regulatory and legislative response.
But people want blood. Nick Smith's wold be nice. And they might get it...
The poor old Chinese must feel a bit singled out here. As various official sources have pointed out, that while they are significant overseas buyers of our property, there are other countries that are also very significant purchasers. So if the Chinese are buying 39% and there are other significant overseas purchasers, then the percentage left for local buyers is even less than the 61% which would be the case if the Chinese were the only buyers. Maybe this problem is even worse than these figure indicate? Whatever the case it is well past the time when we need to collect accurate data.
As I warned previously the government has been very foolish and weak by not addressing this a lot earlier, head on and in a way that treats all foreign purchasers the same. That way they would have forestalled this inevitable public backlash and the damage that it is doing to our relationship with one of our largest trading partners. The longer that they leave this mess without acting, the more catastrophic the consequences are going to be on a multitude of fronts.
Another point. A large part of the 9% Chinese in Auckland are also severely disadvantaged by this situation.
A few items related to Don McKinnon. Must be many people with vested interests benefitting from the Chinese economic expansion within New Zealand
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=112…
http://www.stuff.co.nz/national/politics/10039707/McKinnon-named-ambass…
http://www.nzchinacouncil.com/#!sir-don-mckinnon/ced0
http://www.nzasianleaders.com/distinguished-speakers/sir-don-mckinnon/
http://www.nbr.co.nz/article/country-biggest-apartment-project-funded-c…
http://falfn.com/CrusaderRabbit/?p=26664
http://asianz.org.nz/about-us/our-people/board-of-trustees
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