By Bernard Hickey
Building and Housing Minister Nick Smith said data released yesterday showing 3% of home buyers in the March quarter were foreign tax payers had settled the debate over foreign ownership and meant there was no need for a land tax on non-residents, as Prime Minister John Key suggested was possible last month.
Nick Smith told Morning Report this morning the data settled the debate and there was no need for a land tax, based on this data.
"For some, unless we literally blood test people at every auction, they won't be satisfied, a reasonable person would say from this data that the whole debate and accusation that foreign buyers are dominating and at the core of our housing problems with accusations as high as 40% being from China is nonsense," Smith said.
Smith acknowledged the problems in the survey around what proportion of New Zealand tax residents were also foreign students or on temporary work visas, and how many were living in their main home. A flawed survey question found as many as 35% of the buyers who said they were New Zealand tax payers could be foreign students or in New Zealand on temporary work visas, while a further 10% of the transactions did not identify the tax status of the buyer because the deal was begun before the October 1 cutoff.
"There are some deficiencies which we can dance on the head of a pin about," he said.
Smith described the criticism of foreign buying as a diversion from main issues of improving housing supply through better land planning, infrastructure and lower building supplies cost.
He pointed out that 1,694 of the buyers (out of the total 70,000 properties transacted in the October 1 to March 31 period) were listed as foreign tax residents, while 1,695 of the sellers were foreign tax residents -- "ie the net difference over six months was 1 property out of 70,000 transactions."
"The easiest trick in the book is to create a scapegoat that it is these foreigners that are the problem," he said.
'No need for land tax'
Asked about whether a land tax for non residents was needed, as suggested last month by John Key, Smith said yesterday's data did not support such a tax.
"The Government has said this will be an ongoing database that will be recording three monthly. If we see a radical change then we are a Government that is pragmatic, that would respond, but there would be no basis for a land tax on the basis of the data that came out yesterday," he said.
Asked to confirm ruling out such a tax, he said: "I'm not the Minister of Revenue or Finance. You're drilling into a question that is well above my pay grade. My job is to focus in on the housing issues."
"These numbers are not sufficient to justify that sort of intervention and would divert us from the more important work that will make a material for Kiwi families. With this data, we can move on from blaming foreigners and focus on the real questions."
100 Comments
The govt and dishonest John can peddle their fiction all they want but the ethnicity of B&T's top 25 agents tells the true story:
https://www.barfoot.co.nz/news/2015/may/top-salespeople-2015
Does Nick Smith have a dreadful hangover or what ? He misses the point completely about who is buying the properties
We are not interested in whether the buyers are foreign non -residents or not , the fact remains you can use a front to buy the property who could be resident or PR or even a Citizen .
Secondly , the real damage is being done by the 1,100 new arrivals every 7 days , that's the real problem .
Our immigration policies are to encourage wealthy and highly skilled migrants
What do we expect ?
That they want to be tenants ?
Wealthy and highly skilled folk are usually not stupid people and know that being a renter is impoverishing , they simply don't do it
THAT'S RACIST!
They just work harder! You'll see these real estate agents working looooong into the night, long after their Caucasian colleagues have gone home...
.....
.....
......
..... because that synchronises much better with the hours their clients in Shanghai, Hong Kong and Beijing keep ;)
Well it's simple.
You accused the government and it's Prime Minister of being dishonest (played the man) - but you didn't supply any supporting facts or arguments to support such claims.
You then took a sales chart from a single real estate firm and implied:
(a) it was more reliable than the known research; and
(b) a photo of someone that reveals ethnicity was a reliable indicator of something meaningful.
In doing so you revealed a disregard for the known facts and a willingness to accept any kind of barely rational explanation that shows you trying to find justifications to prejudgements.
And I called you on it.
Mr Triple,
You first posted "Ralph, you are an idiot". Then you deleted that and changed that post. Then you posted this:
"Again Ralph - I invite you to please explain why the Asian B&T agents are so much more successful than their colleagues?"
I quote that post, in case it is also deleted by the time I have written this reply. In any event, this is my first reply to your "again" post.
The foundation for your implication is that a sales results personnel list at Barfoot web site is a more reliable indicator than the specific research that has been done. Rather than enter into long windy arguments about why particular sales people at real estate firms might be more successful than others I simply point out you have provided no rational basis for that assumption.
It is ironic that the poster who first accused someone of dishonesty and then called me an idiot is now insistent on the accusations front.
You accused the government and it's Prime Minister of being dishonest (played the man) - but you didn't supply any supporting facts or arguments to support such claims.
But this is the contentious issue. New Zealanders wanted the government to collect proper data on foreign property purchases so that we could see the true extent to which they are influencing the market. Instead of quality data, LINZ produces a highly flawed survey that under-reports (almost to the point of meaninglessness) foreign buying and makes proper analysis impossible.
Now you are asking for supporting facts yet they're impossible to come by due to how the data was collected and the poor design of the survey. Understandably people are very frustrated that after all the government's 'huffing and puffing' they still didn't bother to collect accurate data which would enable a proper debate about this issue.
To make matters worse, they now appear to be using this highly flawed data to placate the people and claim it is a non-issue. Quite frankly they can shove it.
Hi Plutocracy,
You don't *have* to provide any facts or even argumentations, but if you don't -- well -- then what you have done is just make a statement. Without any support it's not even an argument.
It's becomes a problem when empty statements, rumours, innuendo, and the like, are represented as more than they are.
You've missed the point (I imagine deliberately).
The government should have collected proper data - they didn't. Now they are saying there's no problem despite formal acknowledgements that the data is extremely poor / limited.
You can't have a reasoned debate without adequate data and unfortunately individuals alone do not have the means to collect this data. Instead we were relying on there being an accurate study to collect this information. Now they have stymied this debate, well played National.
No doubt the data is not complete nor completely accurate. In absence of it what would you have the government do, make decisions without facts, I guess not so we all have to wait.
And I agree, you can't have a reasoned debate without adequate data. Which is why I called out the unreasoned prejudice above, I don't want our society to be driven by ethnic hate.
However, I don't see any conspiracy with the data mistakes. Governments are not known for their top drawer execution on new things and ever has it been. Bureaucracy seems more suited to the long haul. Even the very large multinationals are like that, in my experience.
Besides, these same department staff who produced this flawed research will, no doubt, be there when there is a change in government.
I hope interest.co.nz are reading this...."I don't want our society to be driven by ethnic hate" Ralph !! Thank god someone has some sense here!! I think it has come to a time that people must start building regardless of the Council and the stupid laws that are holding building works back.......Neither a Council nor a Government has ownership over a person so how can they direct what a person may or may not do? They do not have this right so why do people allow this nonsense to happen to them......go get a section and slap whatever type of house you want on it......build the damn things yourselves......don't take the housing supply issues out on other people of differing ethic origins.....it is the system that is wrong!!!
37% citizens and PR.
35% student and temporary visas (and their mums, brothers, nanas, whoever) + 3% non tax resident buyers = 38%
????% companies and trusts. Still 25% of buyers unaccounted for.
Conclusion: NZ citizens and Permanent Residents are outnumbered by foreign buyers.
Yes and considering that Mr Key said just a day or two ago, that he would do his up most to support Anti-Money Laundering measures for New Zealand.
How can he do that if he's going to exclude and ignore some of the largest contributing groups for facilitating money laundering in to the NZ property market, such as 'Foreign Trusts' and 'Money Mules' those on Student and temporary visas?
https://nz.news.yahoo.com/video/watch/31557941/will-panama-papers-stain…
The Government is clearly clueless as to what to do next , the RBNZ having acknowledged our financial system is at risk due to the overheated market , they don't know what to do ........ is there even a plan ?
We all know there is a problem , seemingly with the exception of those in the Beehive
Lets assume the 3% figure is correct. Put yourself, or your progeny, in an auction room looking to buy your first home. You and your partner earn a modest $100k between you, and have saved hard for your desposit (despite having the life sucked out of you by your landlord). You think you can afford the CV value, or a little above it if necessary.
In the room bidding against you 99 others, three of whom are foreign buyers. These foreign buyers are not borrowing from the bank, and are not enslaving themselves to a mortgage for the next 30 years, they are looking to get money out of their local economy. Their motivation is return of their investment, not return on it.
Who do you think the final three bidders will be? Who will the winner be? What will the final be?
So you really think that 3% of the buyers coming from a different demographic and economy can't move the market?
Absolutely, 3% doesn't sound significant (thank you Mike Hoskings) but has a huge effect. Consider the house prices in two towns with a 3% differance in population growth - one growing by 1.5% and one declining by 1.5%, Whanganui and Tauranga say.
These non resident buyers (4% in Auckland) are essentially new buyers or an additional demand on top of general demand growth from natural local population increase and immigration. So we could easily be up to about 7% additional demand for the listed properties for sale.
It doesn't take much of a supply shortfall to ramp up prices and visa versa - just look at what happens to the price of oil with a 1% supply/demand imbalance. Add in the speculators and a "buy before the price goes up anymore" type mania and it's no mystery we've got a runaway bubble of epic proportions developing.
The Domino Effect - Interest.co.nz 5 November 2012
It only needs 1 sale to trigger off a domino effect of up to 10 subsequent sales resulting from the first one. Multiply that by 100 or 1,000 or even 4,000 high-roller buyers, that cascades into a lot of sales
Probably the best example of that was provided by Basel Brush about three years ago (in 2009) of a non-resident Chinese buyer who paid $1½ million for a house out in Botany with a CV of $800,000. Purchaser was not even in the country. The transaction was done via phone hook-up. A case of price no object. That type of transaction is cash. There is no facility to arrange a local mortgage. It's cash talking.
That type of transaction then produces a "Domino Effect". The next purchase as the seller moves on somewhere else mortgage free. The one initiating transaction triggers off a series of transactions.
Anyway stick around and Listen to the chatter, and connect the dots.
http://www.interest.co.nz/node/61864/property#comment-713561
Absolutely right. Isn't that what that what that Govt advisor was saying would return $4.7B/year. With that sort of money you could lower the personal and company tax rate significantly and really get the economy moving in the right direction.
But why stop at just the land value, why not the whole capital value (ring fenced)
* Who gets the job to police the 'occupation' by the "legal owner"?
* I guess I will have to carry photo ID at all times in NZ so I can prove I am the "legal owner" on demand?
* Will I get reward to dobbing in my neighbours if I suspect they might not be the "legal owner"?
* How long can I go on holiday as the "legal owner" before I become subject to land tax?
* Does it matter if my holiday is not inside NZ and I cannot be easily contacted?
* Do I have to notify someone of the date I am planning to return from holiday so as to not be subject to land tax?
* If I am away on holiday for 5 months, 1 week and 2 days will my land tax be pro-rata for the time when I did live in my house as the "legal owner"?
* Could I get out of land tax my transferring the house to my wife's name, then take my holiday separate from her, then transfer it back so she can go on holiday?
* Will this mean the death of the professional sabbatical system because you can't leave the country for that long anymore without incurring land tax?
* Does that mean the unit I bought my 91 year old mum to live in must be subject to land tax because she is not the "legal owner"?
* If the house is owned by a trust, does that mean it must be automatically taxed as 'foreign owned' because no NZ 'people' are "legal owners"?
* Maybe everyone will move their house ownerships to trusts so they can take holidays and sabbaticals?
Maybe if I checked in with a police station every night to let "authorities" know where I am at all times. I hear that works for North Korea.
Happy to reply to your concerns. First off though, I do not understand why you have put "legal owner" in quotation marks. The legal owner of a property is whoever is recorded on the certificate of title. You also seem to confuse mere physical presence with occupation. Occupation of land can include the right to exclude others from it. But it should probably also include at least an element of physical presence. That would be for someone cleverer than me to work out. This is just a comments section on a website after all, not a select committee hearing.
But to answer your specific points:
* I would assume the IRD.
* I can't imagine why you would or would need to.
* If that is the sort of policy the government wants to put into place, all power to them. It wouldn't be necessary for the type of land tax I proposed, as it is a matter of public record who the legal owner of a property is.
* That would be up to some clever person at a government policy unit to decide. My guess would be that it would be six months or so, as I understand that is the arbitrary cut off for a number of other laws. If you are absent for that length of time, it probably isn't a holiday any way.
* Can't think why that would matter
* Can't think why you would have to. A person can "occupy" a house even though they are on holiday.
* If you were occupying the property, then you would not be taxed. If for six months of the year the property was empty, then I see no reason why 6 months of an annual tax could not be applied.
* You could. It would probably cost you more in conveyancing fees to do so than you would ever pay in tax.
* I can't think why it would. some people may prefer to not go on sabbatical if they have to pay tax, but they would probably be in the minority.
* Yes
* A trust can't own property. Trustees can. If they also occupy the property, then no tax would be payable. If they do not, then tax would be payable. I don't think I ever mentioned anything to do with foreign owned.
* They can if they want, but on my proposal they would probably just end up paying the land tax rather than avoiding it.
By all means check in with the police if you like. I can't comment on North Korea, but I see no reason why you would be required to do so in New Zealand.
Hope this clarifies things for you.
Yes, two interviews in the last few days stand out as the worst performances that I have seen on national TV.
First was Key repeatedly accusing Nicki Hagar as the one to blame for the Panama Papers despite the fact that NH is only a part of a broader team.
Then Nick Smith's performance today being completely out of sync with realities.
And the winner is.....
So this charade is all pretty transparent, huh? Stage-manage non-scary-to-complacent-dimwits-who-only-read-the-headline number of 3%. Ignore figure that only 37% of buyers NZ citizens and permanent residents. Sweep fact that almost as many buyers are on temporary and student visas as are New Zealanders. Shove issue of buying through companies and trusts under carpet anfd pretend it doesn't exist. Spin in media so that anyone not paying much attention will come out with the impression that the figure of 3% applies to all foreign buyers, and not just non tax residents. Use this shaky edifice of bullshit as flimsy rationale for not doing anything to address problem, and continuing to screw over working, productive New Zealanders.
You expect something different from politicians? Cherry picking data to suit their 'facts' is how it always works. Shame there is no more prime time TV that reports this stuff or asks the real question. Instead we have Hosking tell us there's no issues and it's a sign of a strong economy and country rather than someone questioning the data. Hope they all go bankrupt.
The main reason this is allowed to continue is the dazed spell the govt has the media under. Too me the answer for young New Zealanders is obvious. The govts only master is the polls. Generation rent needs to wake up and get a champion who can move the polls. Govts know the young don't vote but that doesn't have to be so at all.How disadvantaged do they need to get to mobilise themselves?
It seems this needs to be done outside the current political spectrum to circumvent the obfuscationary genius of Key. Look at how Bernie Sanders has galvanised the young. Maybe Shamabeel has the potential to lead such a cause... ?
Basel, Im not suggesting they start a party merely they need to mobilise into a coherent group that can lobby and use the media to get there needs at to the forefront of the debate. If they had 100k on a social network by around election time they will have any amount of leverage to political party policy. They need to take a leaf out of the Grey Power book.
This! Honestly sheep shagger, I have absolutely no idea where my peers are. i sometimes wonder if I just haven't seen the social media page set up for exactly what you just said. There's one fb page for the public meeting we're having next Wednesday with 193 people attending and that's it. Plenty of comments on fb herald articles though. I completely agree that we have new ways today to start a movement and use social media as a base to at the very LEAST bring us together as a group. For the support, the debate and ultimately for change. But, nothing. I know our heads aren't in the sand but I ask...why aren't we hashtagging the s**out of this?
The report is a bit of a shambles. The way it reads in one section does not necessarily match another.
I read it as the 37% which did not need to provide information was defined as a citizen OR resident (tax resident), which means that the 37% you reference may also include student and work visa holders. So people that class as citizens AND tax residents (e.g. passport holder and not living overseas) may be even lower than 37%.
But who really knows.
From FAQ:
"When does buying or selling your main home mean you don’t need to provide information?
You can claim this if you’re a New Zealand citizen or resident and have been in the country recently (once in the past three years for New Zealand passport holders and once in the past year for resident visa holders).
The data settles nothing http://youtu.be/iP1LN6LViYQ
35% of buyers are foreign students or on a temporary work visa - looks like they are all studying property!
check out like mike its a great parody of hosking, scary thing sometimes though is the original hosking and the parody hosking say the same things
http://www.watchme.co.nz/entertainment/like-mike/
Media to blame good point Kakapo.
Ignore figure that only 37% of buyers NZ citizens and permanent residents.
Surely the headline is only 37% NZ Citizens.
How much does the real estate industries and banks spend on advertising in papers like the herald ? Perhaps that is the issue.
I think you've hit the nail on the head.
Most people criticize countries like China for their overt propaganda and yet are oblivious to the fact that we are subject to a constant stream of veiled propaganda from our own power-brokers. You can witness it first hand with this story.
Easy as! This is just one way the system and statistics are skewed, even the immigration consultants are in on this rort:
"My wife is a foreign National and has been a New Zealand citizen for the last 25 years, 2 years ago, her niece came to NZ to study on a student visa and opened a NZ bank account, got an IRD number and now her family has deposited money into a bank account in her home country in an account owned by a NZ company in Auckland, who in turn have now deposited the equivalent amount into the students NZ bank account, she has now brought a home here in NZ.
This money was disguised as funds for the daughters NZ education fees and funds to pay her living costs.
When the student went to renew her student visa last year, this process was pointed out by the immigration agent and the steps to take and the people to visit to go through this process were given to her at this time."
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=116…
A lot of sayings....Not enough doings....by our Government watch dogs.
I have a few.
Fair Exchange is no robbery. Fiddling the Exchange via others...Classic Kiwi.....
or is that Yuan step for man, Yuan great leap for mankind..?
Birds of a Feather flock together. Methinks.?
There is another old, old saying..too many crooks spoil the "Country" for those too honest to spot the difference....(It was broth....but that all boiled over...from the GFC..)..
Yaun door opens, another closes. (As kiwis are shut out of their own homes).?
or is that just a classic Tui. ?
Now it is mandatory...whatever it takes....is now the escape clause.
"There are some deficiencies which we can dance on the head of a pin about"
Well, what an understatement. I would say that the deficiencies are of substantial enough scope to invalidate any conclusions about foreign ownership drawn from the data.
A fundamentally flawed data generating process that should have been evident from the outset. It makes you really question whether it was an intended omission.
If I ever presented any analysis or conclusions based on data with the same level of integrity as this, I wouldn't find it very easy to get work.
Why should politicians be exempt from the same risk?
I agree with the Minister, but for different reasons. It is clear that no financial constraints exist. If the buyers were after value for money they wouldn't be buying a $500k house for $1.2mil. So a percentage land tax is unlikely to do a thing to stem the demand, let alone reduce prices.
I find simplicity always works the best. No citizenship = no property.
In a more sober moment, it is of course perfectly possible to institute a land tax. At LG level, the Rating Act allows a choice of basis for rates, land value being one. So if push came to shove, a concerted change in rating basis can be done using existing mechanisms. A bit of maintenance to the rating basis settings in the billing software and voilà - a land tax.
Of course, this requires a few wetware adjustments as well:
- Local Body Politicians with economic nous
- Ditto with cojones or the female equivalent thereof
- Calculated deafness to the anguished cries from affected ratepayers
- Adherence to the land-value-basis for a generation or two to let the effects settle in
Upon mature reconsideration - nah, can't happen. Incompatible with human nature: too long-sighted, even-handed, and too little opportunity to exercise petty power.
Sigh.
Shame on this government. Produce highly inaccurate figures. Release to public, picking lowest figure possible, that obviously doesn't represent foreign buyers real number. Then use that as an an excuse to do nothing.
Meanwhile, young NZer's can't afford a home, or have to leverage to the eyeballs to become debt slaves most of their lives. NZ has enormous consumer debt. NZ, as one commenter showed link to the figures the other day, has the worst house price to income ratio in the world. Financial stability risks for whole NZ economy keep going higher and higher, risking an economic calamity here.
Meanwhile, our houses, farms and businesses are sold off to foreign nationals (most likely using printed money from offshore).
This is just absolutely crazy, and completely dishonest and harmful, from Nats. Unbelievable!
True, but it's not like anyone else will fix it.
Labour may cry foul when they are opposition, but they all feed from the same trough. So real change is unlikely to happen no matter who you vote for.
Labour are trying to be center, National are center. Nec minnit one Sole "center" party dictating to you through the one state run news service. At least the news merge in public.
Immigration rorts ripoffs are probably going to seem fairly academic in the near future; as the ongoing degradation of the planets ecosystem gathers steam, the term boat-people will seem quaint as container loads leave their dehydrated/ poisoned/ submerged/ bankrupt/ overcrowded ....you pick the scenario..homes looking for a piece of the pacific lifeboat NZ!
So lets enjoy the debate while we can. The Germans have a phrase for the displacement of whole populations but it escapes me at the moment.
Shame on LINZ for ,firstly producing such low quality and ambiguous data and secondly being pressured into releasing it. What happened to an apolitical public service... Another Key legacy. At least there is still question time to hold the govt to account... Oh wait we have speaker Carter...where's the Gin bottle.
Breaking News.
Have you heard, it is all about houses. Up and up and up and up and up and up she goes, where it ends, nobody, but nobody knows.
drop the rates, drop the currency, drop the pretense, lift the leverage. lift the debt, lift the swap rates, drop the income levels, lift the immigrant ratios, lift the education levels, begs the question.
Should I buy a not for profit Dairy Farm, or a small plot of land in Awkland to use as a carpark.
I have worked all my life, in Parliament and in helping Banking, but never had to graft so hard, as I do today, as somebody, nicked my idea and now I get all the blame..
Whatever you say, Yes, Minister. indeed Minister, absolutely..Minister...or should I ask John.
I have a slightly different take, as I thought it was quite refreshing for the LINZ CEO to be upfront and frank about the issues. He wasn't sure whether to release them but that would have looked worse and was open and prepared to engage about the issues. Sure, it was then immediately set to high spin by politicians and others, but his frankness was, I think, admirable.
As a policy effectiveness researcher though, it was troubling how little attention was given to the fact that counting only started after policy settings changed and anecdotally had cut off much of the flow. So we don't know what it actually was before that policy change, and now policy is being effected on the basis of this information, both without recognition of the pre-determined skew, nor seemingly where the 'real' figure even after the self-induced deflation effect might actually be, somewhere between 3% & 40-ish?%
Ron
Even if govt is setting policy based on skewed data and the problem has actually begun to correct itself, a significant contributor to price escalation has to be speculators who are genuine (non student) residents. LTI restrictions on those residents who are highly leveraged is likely to give us a fairly rapid steer on whether it's them primarily driving the insanity, or others such as offshore residents hiding behind trusts or resident family members.
Thanks middleman, absolutely. My comment was probably a bit "policy wonkish" actually. Thank you for your kindness enabling me to see it myself :-)
Wearing my dusty old BCom (Econ) hat that's got to be a huge part of it, speculators whether resident or non-resident. Elements of which in addition to fundamentals will inevitably be driven partly also by a tax structure which artificially favours property over other investment (and banking system likewise) [watch me get flamed now...], and whatever market behavioural issues are most prevalent.
From the perspective of my own research I'm particularly interested in the purchase of real estate with criminal proceeds, locally or from offshore. Unlike purchase with legitimate funds, arguably not beneficial for the economy (though few policy makers yet seem to make any distinction between legitimate and illicit funding), and if above de minimus levels would have a distortionary price impact, artificially helping drive up prices for the following (legitimate buyers) for each affected property and the wider city/region.
But for obvious reasons very difficult to pin down, whether it's too small to have an effect or having some impact, and if so how much.
As for surnames giving a clue to origin, how about surnames as to intent or occupation.
Take the name Smith for example, a very popular name that has stood the test of time, originally meaning to beat metal, but now also used to indicate malleability in general eg Wordsmith.
So any suggestions as to a prefix or derivative of Smith to describe Minister Smith's beating up of house prices?
Here are a couple of suggestions:
Minister Smithereens, or
Minister AverageNZhomebuyersare$%@*smith
Hi WallStreet, what a brave name you have.
At this point there does seem to be a big difference between some previous media claims, around 39% and the new research, around 3%. But on the other side of the coin this latest research is not conclusive because it is incomplete and may not be accurate enough. This seems to be as close to the facts as we have got, which as many have pointed out and are frustrated about, is not close enough.
Sometimes you have to admit that you don't know enough to know. As someone else said, you can't have a rational debate with sufficient facts.
As for the students, I would only be speculating.
Q. Is a student loan even enough for a deposit in Auckland?
Q. Are students getting major financial help from parents; if so at what scale?
Q. If they are NZ residents should why should we see that as a problem?
What do you think?
Just that I regularly meet people in IT in Australia who have a non caucasian ethnic background who first got a study visa and then stayed in Aussie once they got their degree and the government gave them a permanent visa.
I don't know if it works that way in NZ. It certainly seems to provide a regular stream of well educated, english speaking, highly motivated workers.
Just to raise that Herald article about the arriving niece, it could be that many already have relatives in New Zealand and it is a safe place to get a tertiary education.
They may stay but it is just a matter of good fortune, either way they have the IT degree.
Anecdotally of course, i have no evidence.
I understand statistically about 1 in 6 international students have eventually received permanent residency to stay in NZ. They have to pass a rigid point system imposed by Immigration that evaluates their language proficiency, qualification, work experience, job offer, the ability to settle etc. BTW, international students pay tuition fees about 3-4 times higher than NZ students, and they don't get NZ student allowances / loans.
Well,
Some parents in NZ could afford to buy a house for their student children but it is a rare event.
Saved on rent and there was the possibility of some capital gain.
If it is happening on a scale that is noticeable they are probably aucklanders, they are the ones with enough equity to buy in auckland.
Could be Sydney people though, or further afield.
30% sounds like there is something bizarre going on.
They wouldn't have to buy it outright, they could guarantee a loan, provide a second mortgage, give a top up to a deposit, buy something jointly or just help out with repayments.
It's common enough in Sydney now to be a "thing";
http://www.smh.com.au/nsw/generation-sponge-home-loans-bills-paid-for-b…
One of the long term societal costs to high priced real estate markets is wider families getting pushed further and further apart as kids can't afford to live anywhere their parents.
Well,
Some parents in NZ could afford to buy a house for their student children but it is a rare event.
Saved on rent and there was the possibility of some capital gain.
If it is happening on a scale that is noticeable they are probably aucklanders, they are the ones with enough equity to buy in auckland.
Could be Sydney people though, or further afield.
30% sounds like there is something bizarre going on.
The fact is China has an oversupply of cash and it is flooding the property markets all over the world. Even if only 0.01% of it hits our shore it is significant enough to bring about a property market tsunami. But NZ should view this as an opportunity as a country held back by high cost of capital and limited economies of scale. If the Asians like to buy NZ properties, increase the supply and encourage them buy as much as they want. That creates jobs, retains long-term investment, and injects dynamics in our economy. What the government needs to address is the outdated RCA and the efficiency of council procedures. Xenophobia does not get anything fixed.
That is of course totally rubbish.
If they want to park their cash, then let them build and then only on newly developed sites with all infrastructure already added to their contribution.
Anything that sucks our own citizens dry is unacceptable.
We need this dozy Government to set some rules on immigration that we are in control of.
Not sure the local owners of properties sold to the so called "foreign buyers" at decent prices would agree they were 'sucked dry'. The "foreign buyers" did not buy at a discount, instead, they often pay premiums over the market value, and that of course includes all infrastructure cost. The "foreign buyers" do not take advantage of the locals nor the NZ system, they do not collect doles, instead, they inject significant amount of money into the NZ economy and probably pay more tax to NZ than you and me. As long as these are legal funds there is no reason for NZ to reject them.
I guess it depends what you classify a foreign buyer as. I would think someone in the country as a student or temp visa is a foreign citizen ie foreign buyer. 50% of house sales involved buyers who have only New Zealand tax residency. So this means 50% only had NZ Citizenship. That is your problem.
per the NBR:
http://www.nbr.co.nz/article/small-number-house-buyers-have-foreign-tax…
The data also shows 50% of house sales involved buyers who have only New Zealand tax residency; 37% involved buyers who did not need to provide tax information – the majority of these were New Zealand citizens or residents who were buying their main home; and 10% involved buyers who did not need to provide information because their sale and purchase agreement was signed before the new law came into force.
The figures actually tell you what is going on and it is just the mainstream media's interpretation of these figures.
Instead of a headline
"Only 50% of buyers NZ citizens" We get
"Only 3% buyers live overseas"
Same data different headline. To much money is spent on advertising by Banks, Real Estate Agents etc so the papers have no interest in reporting the facts and they will focus on what keeps the circus going. Yes they try to look like they care however end of the day money talks.
Shame on the NZ media.
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