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NZ planning to ban overseas buyers from purchasing property in the country

General view of residential housing in central Wellington, New Zealand, Tuesday, Feb. 16, 2016. Source: AAP Image/Dave Hunt

In a bid to tackle housing crisis in the country, New Zealand is planning to ban foreign buyers from purchasing existing homes in the country.

Incoming Prime Minister of New Zealand has announced that the government is planning to ban overseas home buyers in the country in a bid to tackle housing crises. The guardian reported that this announcement by Jacinda Arden will be closely watched by other countries too which are facing similar housing crisis.

New Zealand is desired destination for Chinese, Australian or Asian buyers who look at it as a safe place from potential nuclear conflict, rise of terrorism and civil unrest or just a great place for a getaway.

Jacinda Arden is hopeful that the details of the policy will be finalized within a fortnight. She said there was no confusion about the issue and that Labour had always made clear they would undertake measures that would stop people living overseas with no intention of moving there from buying existing NZ homes.

The government is looking at ways to enact the ban without breaking existing agreements.

"We are still working to resolve that issue," Jacinda Arden said

Land sales to foreign buyers are booming in New Zealand, with 465,863 hectares (1.16m acres) bought in 2016, an almost sixfold increase on the year before. That is the equivalent to 3.2% of farmland in a country of 4.7 million people. Although there has been a boom in the property market, yet, official statistics show that of the 48,603 property transfers registered by the government in the three months to June, just 3% were buyers with an overseas tax residency.

Domestic buyers are felling that they are increasingly missing out. Only a quarter of adults in NZ own their own house compared to half in 1991. Soaring property prices are one of the main reasons that have put home ownership out of reach for many people. Many families are even living out of cars, garages or shipping containers.

The proposed ban on foreign buyers will only apply on non-domiciles. 

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