Overseas Investment Office approves sharp increase in foreign land ownership

Thursday, 9 March 2017

Forestry is popular with foreign investors.

Foreigners snapped up 362,000 hectares of freehold farm or forestry land and 103,000 ha of leasehold land in 2016, a hefty increase from the year before and higher than the average over the last 10 years.

In 2015 the Overseas Investment Office (OIO) allowed only 75,000 ha of freehold land and almost 5000 ha of leasehold land to change hands.

The biggest year for sales was 2006 when more than 600,000 ha was sold. The gross figures indicate where New Zealand interests are involved alongside foreign, the net indicates an overseas buyer only.

In the decade 2007 to 2016, the average was 131,012 ha of freehold and 51,177 ha of leases and other interests in land approved for sale.

The Campaign Against Foreign Control of Aotearoa (CAFCA) said the figures were underestimates because sales to Australians under $501 million did not need OIO approval.

Overseas ownership of New Zealand land is greater than the National Government has admitted in the past.

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The largest sales involved forestry, and of companies already owned by foreigners being sold to a new foreign entity.

For example, Australian superannuation fund Unisuper and Canadian insurance group Manufacturers Life Insurance Company, together bought a total of 111,000 ha off US company Taumata Plantations.

In another case US forestry company Rayonier bought 74,227 ha of freehold land from Matariki Forests, owned by a consortium from the UK, Luxembourg, Sweden and Holland.

Economist Bill Rosenberg, who conducted the research, said statistics on sales of land to overseas interests were poorly recorded and incomplete.

'Our best estimate is that in 2011 at least 8.7 percent of New Zealand farmland including forestry, or 1.3 million ha, was foreign-owned or controlled and it could have reached 10 percent.'

This was despite former Prime Minister John Key's assertion in 2014 that foreigners owned only 2 per cent of farm and forestry land.

Rosenberg said CAFCA's opposition to foreign ownership of land was based on the fact it was 'the bedrock of our international competitive advantage' and the benefits were often overstated.

For example, a KPMG report recently showed US investors, who were the largest between 2013-15, invested $4.5 billion, but over the same period they removed $3.2b from New Zealand.

NZ First leader Winston Peters said the latest sale figures showed the Government did not 'give a hoot' about the country's future.

'The question much be asked – where is the gain for New Zealand?

'A recent sale approved by the Overseas Investment Office proclaimed that the buyer was a 'key player in a key industry'. He went unnamed until sleuths revealed him to be an American TV broadcaster who likes fly fishing. What exactly will be his 'key' contribution and what key industry was that?' Peters asked.

'Too many foreign buyers are here in pursuit of their own interests. Our preference is for New Zealanders to farm and look after the land for generations to come.'