Government softens foreign buyer ban

The AM Show 20/06/2018

The Government has loosened the rules around its proposed overseas buyers' ban on New Zealand property.

Some multi-storey apartment buildings are now exempt, and buyers from Singapore and Australia will still be able to buy property.

One Property Council expert applauded the move, remarking that the new rules will get more houses and developments built.

Changes to the Bill mean foreigners can buy apartments, or in some case buildings off the plans, and keep them. Initially, they were going to have to sell them once they were built.

The move means foreign developers can build residential properties of 20 dwellings and rent them out, meaning there will now be the possibility for foreign landlords.

Property Council head of advocacy Matt Paterson told The AM Show the changes to the Bill mean more housing will be built.

"New Zealand needs more houses and with lower restrictions on development we're actually going to get more houses," he said.

Large scale apartment schemes have been having trouble getting off the ground over the past few years and Mr Paterson said this was because selling off the plan was proving difficult.

But with the new provisions in the Bill it will now be easier.

"It's true that some big housing developments and apartments mostly were struggling to be economically viable and part of that viability is getting presales for the bank to even lend them money to start construction," he said.

"There were news headlines over the past year about a number of those apartment buildings not going ahead, this was a real problem."

Mr Paterson was thankful for the Government's changes to the Bill and said it was due to realising during the select committee process that the previous provisions were too tight.

"This all happened really really quickly, it got tied up in the politics of a hundred days and the whole purpose of select committee is to test out these provisions and work out what the real life situation is," he said.

Foreigners can invest in property, but only buy apartments.

"Fortunately they didn't let politics get in the way, they listened to what [the] Property Council and all of our members who were presenting to select committee said."

The Government's decision to soften their stance on foreign buyers is being hailed as a win for renters.

Andrew King from the Property Investors' Federation said it is a practical move. Overseas investors will still be able to invest in properties, but can't occupy them.

"I think it will be good for tenants because we actually need more rental properties at the moment so anything that helps get more rental properties in the market will be a good thing for tenants," Mr King said.

Watch the full interview with Matt Paterson above.

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