New Zealand bans foreigners from buying homes in the country

Silicon Valley billionaire
Peter Thiel has bought property in New
Zealand.
Shutterstock and Neilson
Barnard/Getty

• New Zealand’s government has banned foreigners from
  purchasing existing homes in the country.
• The Overseas Investment Amendment was passed by
  parliament on Wednesday and is designed to make housing more
  affordable for nationals.
• “This government believes that New Zealanders should
  not be outbid by wealthier foreign buyers,” the associate
  finance minister, David Parker, said in a statement.

The New Zealand government has passed a ban on foreigners buying
existing homes in the country in a bid to tackle soaring house
prices and rising homelessness,
Al Jazeera and
The Guardian reported.

The Overseas Investment Amendment bill was passed by parliament
on Wednesday and is designed to make housing more affordable for
New Zealanders, particularly first time buyers. It follows a
surge in the number of overseas buyers coming to New Zealand to
buy property in recent years.

“This government believes that New Zealanders should not be
outbid by wealthier foreign buyers,” the associate finance
minister, David Parker, said in a statement. “We should not be
tenants in our own land.”

Half of New Zealanders owned a home in 1991, a number which has
since dropped to one quarter.
The Economist released a report in 2017 that said New Zealand
house prices were the most
unaffordable in the world and prices in Auckland rose by 75%
over the last 4 years alone,
The Guardian reported.

“We think the market for New Zealand homes and farms should be
set by New Zealand buyers, not overseas buyers,” Parker told the
Guardian. “That is to benefit New Zealanders who have their
shoulder to the wheel of the New Zealand economy, pay tax here,
have families here. We don’t think they should be outbid by
wealthier people from overseas.”

The majority of foreign buyers come from China and Australia, but
many also come from the US and UK. All nationalities are subject
to the bill except buyers from Singapore and Australia.

New Zealand has become known as a get-away for the super-rich who
see it as an escape from crowds, social unrest, and as a safe
refuge in the event of nuclear war. Buying a house in New Zealand
has become a sort of code for getting “apocalypse insurance,”
Reid Hoffman, co-founder of LinkedIn, told the
New Yorker in 2017.

Silicon Valley billionaire Peter Thiel is perhaps the
most famous expat to buy property in New Zealand. Thiel
managed to
become a New Zealand citizen and purchase his property despite
having spent only eight days in the country.

Parker said: “We were in opposition at the time Peter Thiel was
granted citizenship… We can’t undo what has already been done.
But that won’t happen in the future.”

Critics have said the legislation will dampen business and a
spokesperson for the opposition party said the foreign buyer’s
ban was “xenophobic.”

Although the ban applies to existing homes, foreign buyers can
still purchase property in new block housing developments.