The Finance and Expenditure Select Committee has reported back on the Government's foreign buyer policy, recommending changes to simplify the process of buying land to create jobs in New Zealand.
The Overseas Investment Amendment Bill aims to ban overseas buyers from purchasing existing houses, and to "ensure that the market for our homes is a New Zealand market not an international one," Associate Finance Minister David Parker said today.
"We believe that from the most expensive seaside and lakeside properties to the most modest homes in our towns and cities New Zealanders should not be outbid by wealthier foreign buyers."
The Select Committee recommended changes to simplify buying residential land for commercial purposes, that aims to help to create new jobs, and "have also rationalised forestry investment by including forestry rights, which are a means of buying forests which needs to be covered, and then applying a light-handed regime to encourage foreign direct investment in forests".
The Bill, which will now go to its second reading in Parliament, would allow overseas investors to invest in new housing and homes for rent-to-own or shared-equity arrangements, in an attempt to "help first home buyers to get their foot on the property ladder," Mr Parker said.
Australian and Singapore citizens and residents would be treated like New Zealand citizens and residents.
According to Real Estate Institute of New Zealand, the proposed changes by the Select Committee will not solve affordability issues, but appreciated it had acknowledged "some of the criticisms around restrictions on off-the-plan sales", chief executive Bindi Norwell said.
"Allowing up to 60 per cent of apartments to be purchased by offshore buyers will ensure that we don’t constrain supply, which was one of REINZ’s largest concerns in relation to the ban."
Additionally, the loosening of the requirement for developers to relinquish ownership of properties once they have been built is another positive. We're also extremely pleased that we have clarity around where the responsibility lies for ensuring a person complies with the Act."
"However, it is still our view, that it's not worth going ahead with a ban on foreign buyers. We don't believe that the ban will resolve any housing affordability issues given the proportion of sales to overseas buyers is so low."
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