Realty Boss Calls For ‘foreign Buyer Ban’ Rethink

“It’s a mixed bag of market predictions and economic forecasts, but in the end perhaps the pandemic will boost the overall appeal of New Zealand property. With that in mind, the Government needs to consider softening its foreign buyer ban - even temporarily,” says Derryn Mayne, Owner of Century 21 New Zealand.

Ms Mayne says confusion reigns as to where the real estate market is heading with high profile New Zealanders, industry commentators, and economists all weighing in with opinions which are often contradictory.

“We have some saying it’s going to fall by double digits, while others are saying it should hold up relatively well given record-low interest rates and a continual housing shortage. All while buyers and vendors are wondering whether to act now or wait,” she says.

She says for those selling and looking to buy again they’ll be doing so in the same market, so it won’t make much long-term difference. For first-home buyers, waiting could prove a gamble because house prices might rebound sooner than expected. While many investors, she says, seem keen to stick to their plans helped by healthy rents.

“Some observers were predicting a property crash a month ago. Now with the restrictions lifting and life starting to normalise, more commentators seem a little more positive in their outlook.”

New Zealand’s Century 21 boss is reluctant to crystal ball gaze but says given the likes of share market volatility and painfully low term deposit rates, residential property is increasingly viewed as a safe haven, as is New Zealand.

“New Zealand’s getting headlines all over the world for its overall handling of Covid-19. Many living in the likes of the United Kingdom, United States, and some European countries must be wondering ‘where is a safe place for me to live and invest my life savings?’

“Many Kiwi ex-pats will also return off the back of this. At the same time, our offices are getting plenty of enquiries from overseas investors keen to buy into new-build residential developments, which will only add to already strong domestic housing demand.”

Whether or not the Government should soften its foreign buyer ban, she believes, should now be on the table. The 2018 move, which stopped almost all non-residents from buying existing homes, saw the number of residential properties sold to overseas buyers’ plummet in places like Queenstown which now face a post-pandemic economic crisis.

“The Government has given an assurance that no stone will be left unturned in its determination to mitigate Covid-19’s economic fall-out. As part of that, they should revisit their policy to ban foreign buyers. Opening up New Zealand real estate a little more, even temporarily, would definitely provide a boost to the housing market and country,” she says.

When the Overseas Investment Amendment Bill came into force on 22 October 2018 its impact was swift and significant. Sales to overseas buyers dropped by 81% in the following quarter compared to the same time a year earlier. Ms Mayne says any policy reversal would equally have a quick and demonstrable impact.

She says Century 21 has been busy since some restrictions have lifted, with the company also opening two new franchises in the South Island and South Auckland’s Papatoetoe in recent weeks.

www.century21.co.nz

© Scoop Media