Foreign house buyer approvals drop sharply under new rules

Thursday, 9 May 2019

Auckland was the most popular place for foreign property buyers.

In the last six months the Overseas Investment Office has approved 103 applications from foreigners to buy homes in New Zealand.

This is is the first time non-citizens have had to apply to buy property.

The numbers released on Thursday followed information from Statistics New Zealand showing an 81 per cent drop in overseas buyers in the first three months of this year compared to a year ago.

The Government passed the Overseas Investment Amendment Bill on October 22.

* What is the Overseas Investment Office and why is it controversial?

* Who does the foreign buyer ban affect and will it make housing more affordable?

* Tougher rules on foreigners buying 'sensitive land' stall luxury property sales**

The legislation stops foreigners not intending to live in New Zealand from buying existing homes.

Land Information New Zealand group manager Vanessa Horne said she expects to see a continuing trend of declining numbers of foreigners buying homes over the next few months.

'There has been a time lag with settlements of agreements entered into before the new rules came into effect but it's clear that far fewer overseas people are buying homes, unless they have the residency visas that allow them to,' she said.

Since the new rules came into effect, Overseas Investment Office (OIO) staff had answered more than 600 queries from conveyancers, real estate agents and the general public about the new home buying rules, she said.

Horned said there had initially been some confusion over what the rules meant.

'Early on, some people applied to us who didn't need to and some people applied who did not qualify to apply.'

People from the United Kingdom mad up the largest group, with a third of the applications.

The second highest number of applications were from China at 20 per cent, followed by the United States making up 8 per cent.

Auckland was still the most popular place for applications, Horne said.

Under the new law, Australian and Singaporean citizens don't have to apply to buy property nor do permanent residents who normally reside in New Zealand.

However, permanent residents who don't normally live here, and permanent residents of Australia and Singapore do need to apply and to get approved they will need to then live in New Zealand after the property purchase.

Those on temporary visas such as students and tourists are ineligible to buy property under the new rules.