HSBC Chief Economist for Australia and New Zealand Paul Bloxham told Jessica Mutch on TVNZ 1's Q+A programme that "there's still quite a bit of uncertainty" as to what the impact of the Government's plan to ban foreigners buying established residential homes will be.
But he says, "what we know is that the foreign purchases have not been the major driver of what's been going on in the New Zealand housing market in recent times anyway. And what we also know is that the New Zealand housing market has already cooled to a degree.
"I don't think the bulk of the national housing market story in New Zealand has been dominated by foreign purchases anyway; i'’s been mostly a domestic story."
When asked about the impact of a potential capital gains tax on the New Zealand market Paul Bloxham said, "although in the initial stage, you might expect to see some sort of effect on the housing market, some sort of a slower activity, over time, I suspect it won't make it necessarily a less attractive asset, if you take Australia as the illustration."
Paul Bloxham also told Q+A with signs that the Australian economy is picking up and the labour market tightening.
"One of the things that we'll probably do is take a little bit of the labour supply out of New Zealand.
"That combined with any sort of cutback in migration will see labour supply potentially constrained. And that might start to mean that, actually, you get a bit of upward pressure on wages growth in New Zealand, which you haven't seen for a while."
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