Clamp down on property investors could heat up market in the short-term

Auckland's property market could get even hotter in the coming months with property experts telling ONE News the Government's efforts to cool things down may encourage speculators in the short-term.

There is concern there will be a rush on buying and selling houses before the rules change. Source: 1 NEWS

In just a few minutes today ONE News found a number of websites aimed at overseas property buyers.

"We have companies flying people to China actually targeting investors," says Adam Wang, an Auckland real estate agent.

The are also ads that portray New Zealand as an open door country for foreign property speculators out to make a quick buck.

"Hopefully we'll stop getting those very misleading advertisements suggesting that New Zealand is a tax free haven, it's nonsense," says John Shewan, Adjuct Professor of Accounting.

"This change sends an important signal to overseas buyers, if you thought there was a party, there wasn't, and if there was, it's over," he adds.

Mr Wang believes the Government needs to act on the issue.

"At least this is the Government showing some awareness, something needs to be tightened," he says.

Changes to rules for buying and selling property will see stricter enforcement of tax law and residents and foreigners will be forced to provide more personal information, information the Prime Minister is pledging to make public.

"We need data, statistics to know what proportion of people are buying. Are they speculators? Are they investors?" says Mr Wang.

While Mr Shewan says: "We're flying blind, there's no real evidence about how much tax is going missing and how much property is owned by foreigners."

Cabinet started kicking around ideas on this four to five weeks ago and opposition parties say it's rushed.

Property experts we've spoken to have the same message - people will continue to find loopholes and skirt the rules. They say the most immediate concern is a rush on buying and selling before the changes come into effect on October 1.

The foundations have been laid but the message to the Government is clear - keep building on this.