December last year was filled with changes in the New Zealand Government. A bill that would amend the current overseas act was introduced to revise the Overseas Investment Act. The current act applies to sensitive land, but not residential land. The new bill would fit residential land within the category. According to Housing Minister, Mr. Phil Twyford, the government is determined to make New Zealanders first time buyers able to buy their first home without the competition of foreign buyers. Our property managers have been working hard to make sure our clients get the best out of this situation.
The bill would affect any one who isn’t a New Zealand citizen, resident, or a New Zealand company and this bill presents a risk to Australian companies, even though Australian citizens are exempt from the bill. Commercial property players and developers are the ones most at risk and property managers know that. According to J. Iles (2018), Overseas buyers would only be able to purchase residential lands or houses with the approval of the Overseas Investment Office (OIO). The approval is only given if the buyer proves to the OIO that the land would be used to benefit the country or if the house built by a foreign buyer would be added to the house market. Still according to the same, businesses going through the OIO could take up to one year to get an approval answer. The new bill would mean that foreign businesses, such as supermarkets and petrol stations, would have to go through an Overseas Investment Office consent.
According to L. Walters (2017), it is not certain if the house prices will be affected if the new bill is passed. According to D. Parker (2017), the government had to do something about the whole situation before the TPP trade agreement was finally signed and still according to the same, the value changes in property would be minimal. Taking this into consideration, property managers agree that changes may be nothing or everything.
It is important to bring up that the reason why the government is not sure about how much change the ban would cause in New Zealand, is because there is not enough concrete data regarding foreign buyers (David Parker, 2017). Still according to the same, the lack of data is due to the government refusal to measure it. According to the National Finance representative, S. Joyce (2017), housing prices and supply would not have any major impact with the new bill. The spokeswoman believes that this government move is all related to a political promise. Overseas buyers may be reaching out for help from property managers due to the possibility they will need to sell their properties upon completion or merely because they are not living in the country and therefore they might have to sell their houses in the country.
According to R. Stock (2018), the bill has as an aim to develop a housing market in which the housing prices are driven by locals, not foreign money. However, multimillionaires have requested to leave certain regions, such as Queenstown, as well as mansions exempt from the bill saying that this is an Auckland issue and the lack of investment in other areas of New Zealand will not help the less fortunate, but rather make their situation worse. Some investors even say the bill is xenophobic and even Bill English believes the bill is unnecessary. Our property managers are working closely with clients to make sure they will get the best out of this situation.
As it can be understood from the research above, property managers will strive to attend the needs of clients by making sure they get the best out of a situation in which the outcome is quite uncertain. If you have any queries about the new bill or how the new bill will affect your property reach out to us and we will gladly help. It is important to us as property managers to have our client’s needs and wants met. In this time of uncertainty that may affect all of us living in New Zealand, Metro NZ Property Management has for the past twenty-one years, been working with values of honesty and integrity helping clients investing in property and managing client’s properties. We can help you increase your income, value, renovations and other relevant aspects with your best interest at heart.
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English, B. (2018, January 23). China to put foreign buyers ban to the test – Bill English. Retrieved from http://www.newshub.co.nz/home/politics/2018/01/china-to-put-foreign-buyers-ban-to-the-test-bill-english.html
Iles, J. (2018, March 4). Development ‘could suffer’ under foreign buyer move. Retrieved from https://www.stuff.co.nz/business/better-business/100945545/development-could-suffer-under-foreign-buyer-move
Stock, R. (2018, February 25). Leave regions and millionaires’ mansions out of foreign ownership ban, MPs told. Retrieved from https://www.stuff.co.nz/business/money/101713280/leave-regions-and-millionaires-mansions-out-of-foreign-ownership-ban-mps-told
Walters, L. (2017, November 1). How much of a difference will the foreign house buyers ban make? Retrieved from https://www.stuff.co.nz/national/politics/98429477/how-much-of-a-difference-will-the-foreign-house-buyers-ban-make