Home transfers to overseas buyers in New Zealand on the wane

Ban on foreign home purchasers takes effect

Central business district of Wellington, New Zealand. JoshuaDaniel/Shutterstock

New Zealand recorded a fall in the number of home transfers to people who did not hold New Zealand citizenship or a resident visa, official figures released Thursday showed.

Only 204 home transfers to non-citizens and those with no resident visas were recorded in the March 2019 quarter, down 81 percent from 1,083 in the March 2018 quarter, according to Stats NZ.

The fall in overseas home buyers coincided with about an 80 percent drop in home transfers to Chinese tax residents, according to property statistics manager Melissa McKenzie.

“Overseas people acquired just 0.6 percent of homes transferred in the first quarter of 2019, reflecting law changes in late 2018 that introduced restrictions for overseas buyers,” McKenzie said in a statement.

The share of home transfers to overseas people peaked at 3.3 percent in the March 2018 quarter when the law changes were being discussed.

More: Auckland housing prices dip 30% as affordability issues bite

New Zealand drew flak from market observers when it implemented the Overseas Investment Amendment Act in October. The IMF called the policy ‘discriminatory’ for outright banning residential property sales to most foreigners.

The law nonetheless exempts citizens of Australia and Singapore and allows sales of new apartments in certain developments, Stats NZ noted.

“Despite the large fall in the number of transfers to overseas buyers this quarter, it’s unlikely to ever be zero, due to exemptions for some overseas buyers,” McKenzie added.

Total home transfers fell 3.5 percent in the year to March 2019, Stats NZ further revealed.