Last year, home ownership in New Zealand reached its lowest level in 65 years.
Only one in four people under 40 years old is now a home owner.
University of Tasmania property and housing-management researcher Erika Altmann says increasing migration, both internally and from abroad, plus limited housing supplies -- particularly in areas hit by recent earthquakes -- are fuelling rising costs.
"New Zealand has a lot of the same problems that Australia does at the moment. That is, booming prices, not that many vacant residential properties available, an increasing squeeze on renters and a large number of overseas investors that are seen to be driving people -- locals -- out of the market."
Australians are exempt from New Zealand's new law.
Under Australian law, foreigners generally need to apply for foreign-investment approval before purchasing residential real estate.
They cannot buy existing residential properties, only new or upcoming projects.
Exceptions can apply to New Zealand citizens, holders of Australian permanent-resident visas, international students and spouses of people belonging to those groups.
But the rules can differ from state to state.
The program director of the Master of Urbanism at the University of Sydney, Dallas Rogers, says it is hard to know what long-term impact the policies will have without good data.
"And we need good data for a couple of reasons. One of them is to work out what the inflationary impact might be on the housing market. But what we don’t know is what the inflationary impact is at the level of a neighbourhood or an individual development. So the short answer is we don’t actually know what the inflationary impact is at those micro scales, but, at the macro scale, at the level of the country or the city, we know that it’s actually not that great."
The Federal Government says foreign housing investment creates new jobs in the construction industry and increases government revenue via taxes such as stamp duty.
But housing unaffordability, particularly in Melbourne and Sydney, has spurred Australia to introduce tighter regulations and bigger fees on foreign investors.
An ANZ Bank study last year showed foreign buyers accounted for up 13 per cent of property dealings in popular areas in 2015-16.
But this year’s Foreign Investment Review Board report into the Australian housing market found foreign investment fell by two-thirds during the 2016-17 financial year.
Chinese investment, particularly high in recent years, dropped by around 50 per cent.
Dr Altmann, at the University of Tasmania, says he agrees more data is needed for the government to better track the market.
"Their reporting requirements need to be stronger so that we get a much better look at the numbers that are being generated within the foreign-investment area. And until we get that, it's often kind of hard to say."
Dallas Rogers thinks more regulations might have impact in individual areas with high concentrations of foreign investors, locations typically close to cities and close to public transport.
But he says he does not think restricting foreign investment even further will solve Australia’s affordability crisis.
"If you’re looking at the affordable-housing landscape as a whole, it’s not going to have a major effect. This is a structural, historical problem, our housing-affordability problem. We can’t solve it by just taking a small player out of the market, and that's what foreign investors are."
Dr Altmann says Australia needs to have a larger, more cooperative discussion on the issue.
"The state-based legislation and the federal policy are fairly out of sync with each other. That is, we have the federal government trying to encourage investment, and we have the states saying, 'Well, actually, we only want their investment on these terms,' or certain terms. More importantly, I think that a dedicated minister for housing to look at all housing issues is an important way to go."
