New Zealand bans foreigners from buying existing homes

New Zealand’s left-leaning government has banned foreigners from buying existing homes in an effort to stave off a housing affordability crisis.

The country’s parliament passed the law, which now classes the purchase of existing houses as “sensitive” under the Overseas Investment Act (Stuff), in mid-August.

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Official figures suggest that the overall level of foreign home buying was relatively low — about 3 percent of property transfers nationwide. (Reuters)

However, a further 11 percent of home sales are to companies and other corporate entities. Information on the ownership of these corporates (by New Zealanders or overseas people) is not currently available.

“We can say confidently that 2.8 percent of home transfers were to overseas people in the June quarter. However, it is less clear how many corporate buyers might have had overseas owners,” said Melissa McKenzie, property statistics manager at Statistics New Zealand.

The country’s prime minister, Jacinda Ardern, campaigned last year on a promise to stem housing unaffordability.

The majority of overseas buyers were from China and neighboring Australia, according to Statistics New Zealand.

The bill still allows overseas buyers to build new homes.

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