Prime Minister Jacinda Ardern has today announced that foreign speculators will no longer be able to buy houses in New Zealand from early next year.
The policy is aimed at stopping overseas speculators from pushing up house prices.
The announcement was made in a press conference today following the Labour-led Government's second cabinet meeting in Wellington this afternoon.
"We are determined to make it easer for Kiwis to buy their first home sow we are stopping foreign speculators buying houses and driving up prices," Ms Ardern said in a statement.
"Kiwis should not be outbid like this. That is why we are introducing an amendment to the Overseas Investment Act to classify residential housing as 'sensitive'.
The PM was asked if the ban could create tensions at APEC next week when she meets regional leaders.
This means non-residents or non-citizens cannot purchase existing residential dwellings. Australians will be exempt as New Zealanders are in Australia.
"We expect legislation to be introduced before Christmas and take effect immediately once passed early in 2018. This will fulfill one of our key 100 Day Plan pledges.
"The previous National government chose to put foreign speculators ahead of Kiwi families, but we have chosen to protect Kiwi families and New Zealand's best interests.
"That government claimed this could not done without breaching other free trade agreements and that a stamp duty would be the only effective tool."
Ms Ardern said the previous National Government's stance that banning foreign speculators from the New Zealand real estate market was impossible, was fundamentally false.
"Yes absolutely their argument was false," Ms Ardern said when asked about National's policy.
"We have found a solution, a way that allows us to act in the best interests of New Zealanders and home buyers in New Zealand."
She said whether foreign buyers would be able to buy property "off-the-plan" was a detail her government would be working through, because it may be an issue with the sale of apartment dwellings.
Ms Ardern said the Labour-led Government policy is initially designed to focus on banning "existing homes" from being purchased by foreign speculators.
"Our intent is to stop existing homes form being purchased, and for new dwellings, it must be adding to additional supply, we want to increase the supply of housing availability whilst of course reducing down the amount [cost] of existing dwellings," she said.
Ms Ardern also said this ban on foreign housing speculators will enable her government to "move our focus away from land issues at the negotiating table at APEC" when negotiations on the Trans-Pacific Partnership reach their final stages at the Singapore conference this November.
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