Six months on, the impact of the overseas buyer ban is beginning to show.
The latest figures released yesterday by Stats NZ show that property transactions involving overseas buyers plunged by as much as 80% in the first quarter of this year.
Compared with the 1083 properties sold in the same period last year, overseas buyers purchased just 204 properties in the period to March this year, a fall of eighty per cent. Total housing transactions also declined by 3.5%.
“Overseas buyers accounted for just 0.6% of all property transactions in the first quarter this year, well below 3.3% in the same period last year. Clearly, their purchasing activity has weakened significantly since the overseas buyer ban was introduced,” said property statistics manager Melissa McKenzie.
However, these figures cover only transactions by individuals who are neither New Zealand citizens nor residents, and exclude transactions by overseas organisations or corporate entities.
Ban brings some construction projects to a halt or causes delays
Beyond the decline in property transactions, the overseas buyer ban has affected both local and overseas builders, particularly those under overseas ownership.
National Party housing spokesperson Judith Collins previously said the Government’s overseas buyer ban was affecting some large, overseas-owned residential builders in New Zealand. Since the ban took effect, they have had to apply to the Overseas Investment Office (OIO) for permission to continue building homes, directly causing delays or work stoppages at some apartment buildings under construction.
She also said the ban had reduced investment flowing into New Zealand’s construction sector, slowing housebuilding and reducing the number of new homes available to buy.
Overseas buyers still have some property options
Although the Overseas Investment Amendment Act prohibits most people who are not New Zealand citizens or do not hold residence visas from buying residential property in New Zealand, they still have some options. Recently, 8 apartment developments in Auckland received exemptions from the Overseas Investment Office (OIO), allowing hundreds of apartments to be sold to foreign buyers.
The Overseas Investment Office (OIO) said transitional exemption certificates for large housing developments apply only to apartments likely to be completed within five years, and applications had to be submitted before 21 February 2019.
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To qualify for an exemption, the apartments must also be in multi-storey developments sold off the plans, with more than 20 residential units. At least 20 apartments in these buildings must have remained unfinished before 22 August 2018, with all work expected to be completed before 22 August 2023.
Besides apartments, overseas buyers can purchase other property outside the restrictions, such as commercial property. This is also one factor helping commercial property reach repeated new highs recently.
According to a recent Colliers International survey, commercial property investment confidence reached its highest level in two years. Investors said the direction of government policy was one of the biggest factors influencing their investment decisions.
The 8 apartment projects granted exemptions are listed below:
The Mt Eden apartment project, developed by XCJ Group, at 27 Enfield Street;
The Antipodean apartment project, developed by Vulcan Properties, at 39 Beach Road in Auckland’s CBD;
Union & Co apartments, developed by Conrad Properties, at 15–17 Union Street, Auckland;
Eden View apartments, developed by Young & Partners, on Dominion Road in Mt Eden;
The Beaumont Apartments project, developed by Willis Bond & Co, on Beaumont Street in Auckland’s Wynyard Quarter;
Kingsman Development apartments on Kaipiho Lane in Albany;
The 12-storey Queens Park apartments*, developed by Conrad Properties, on Commerce Street in Auckland’s CBD;
The 57-storey Pacifica hotel and apartment project, developed by Hengyi Partnership, on Commerce Street in Auckland’s CBD.