Sharechat Logo

IMF adds voice to dissent around foreign buyer ban bill

Wednesday 18th April 2018

Text too small?

Building industry figures lobbying to change the government’s mind over the foreign buyer ban have been buoyed by the International Monetary Fund adding its voice to the cause.


IMF officials, in New Zealand this week, called the Overseas Investment Amendment Bill “discriminatory” and hinted that banning foreign investment in housing was an over-reaction to a problem that might not even exist.


“Foreign buyers seem to have played a minor role in New Zealand’s residential real estate market recently,” IMF division chief for Asia and Pacific Thomas Helbling said yesterday. He added that there were other ways for the government to respond if large volumes of unwanted foreign money suddenly flowed into New Zealand’s property market.


Any such measures should be “temporary and targetted”, Helbling said, whereas the buyer ban is a "very definitive measure" and could send a negative signal to foreign investors more broadly.  


The OIAB, a cornerstone government initiative, is designed to stop foreign speculators buying houses which would otherwise be available for New Zealanders.


But most of the more than 200 submitters to the Parliamentary select committee considering the bill are worried the legislation is far more likely to do the opposite to what is intended.


Land and property developer Alastair Porter, one of the submitters to the committee hearings, welcomed the IMF’s stance, saying the foreign buyer ban is just bad law.


“The political problem is that what they are suggesting sounds like a good idea. If you stop selling houses overseas somehow there will be more for New Zealanders. But as 95 percent of submissions [to the committee] said, actually it will have the reverse effect - it will aggravate the shortage of affordable housing.”


The Real Estate Institute of New Zealand was also cheered by the IMF’s statement. Reinz has consistently argued there is no data to suggest foreign buyers are taking the nation's houses. In fact, a survey of real estate agents last year found less than 4 percent of buyers are from overseas.


Reinz chief executive Bindi Norwell says the problem is with supply not overseas demand.


“We need to focus on increasing levels of housing supply – and measures such as KiwiBuild and decreasing red tape will help solve that, not banning a small number of people from buying properties,” she said. 



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar falls with Aussie after Westpac's RBA rate cut call
Intuit juggernaut grows QuickBooks subscribers but momentum slows
Reaction to Budget rules relaxation shows balance 'about right', says Ardern
Augusta lifts net profit six fold as investors flock into new funds
Annual exports to China top $15 billion for first time
Gentrack posts $8.7M loss on CA Plus write-down
Westpac says RBNZ capital proposals would add $6,000 p.a. to an Auckland mortgage
Cavalier says market conditions still challenging
Ryman hikes dividend as annual earnings grow on wider development margin
24th May 2019 Morning Report

IRG See IRG research reports