In a bid to calm an explosive domestic property market and create affordable housing for local residents, the New Zealand government has taken the unprecedented step of banning the sale of the country’s existing homes to foreign buyers.
The announcement was made yesterday by the associate Minister of Finance David Parker who told the New Zealand parliament that “we should not be tenants in our own land”, and that everyday New Zealanders, who “pay tax here, have families here”, should not be “outbid by wealthier people” for local housing.
Under New Zealand’s previous centre right government sales of property to overseas buyers were commonplace; in 2016, more than 3% of the entire country’s farmland was sold to overseas buyers, mostly from China and Australia, although many wealthy Americans have also acquired large property estates in New Zealand, including Peter Thiel, the PayPal & Palantir founder and Facebook’s first external investor, and former NBC host Matt Lauer. Lauer, who left NBC due to sexual misconduct allegations, has become involved in a dispute with local ramblers and hikers concerning access to his estate in the Hawea Conservation Park, whose stunning scenery and nature his opponents claim has been “essentially made unusable for New Zealanders.”
Meanwhile, Peter Thiel, despite having spent only a few days in New Zealand in his life, will be exempt from the ban as he was granted New Zealand citizenship by the previous government, on the basis that he would act as an ambassador for the country.
The government has committed to solving an affordable housing crisis, pledging to build 100,000 affordable new homes over the next ten years. Some of the new build properties will be available for foreign owners to buy, and in fact, buyers from Australia and Singapore are exempt from the ban of purchasing existing property.
Some New Zealanders have found themselves homeless thanks to a lack of suitable properties, and the government believes that by preventing builders favouring mega-rich overseas clients, they will be encouraged to return their focus to the local market, but not everybody agrees.
The opposition party has called the policy “xenophobic” and argued that “The government has put this up as some sort of panacea to the issue of housing affordability in New Zealand, but the evidence is that it is likely to make the problem far worse.”
New Zealand’s current Prime Minister, Jacinda Ardern, who recently had a baby while in office, is the country’s youngest female leader at age 37.
According to the BBC, the media price for a residential property in New Zealand was around $360,000, whilst in June, 82% of properties sold in the country went to locals residents, with just 3% sold to overseas buyers.
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