Image copyright Getty Images Image caption New Zealand is facing a housing affordability crisis

New Zealand's parliament has banned many foreigners from buying existing homes in the country - a move aimed at making properties more affordable.

The ban only applies to non-residents. Australians and Singaporeans are exempt because of free-trade deals.

New Zealand is facing a housing affordability crisis which has left home ownership out of reach for many.

Low interest rates, limited housing stock and immigration have driven up prices in recent years.

Is it a total ban?

No, only non-residents are affected by the Overseas Investment Amendment Bill, which was passed in a 63-57 vote on Wednesday.

They are now banned from purchasing most types of homes - but they will be able to make limited investments in new apartments in large developments.

Foreigners with residency status in New Zealand - as well as non-resident Australian and Singaporean nationals - are not affected by the ban.

Media playback is unsupported on your device Media caption David Parker: "It's the right of people who live permanently in our country... to buy our homes"

New Zealand's Trade and Economic Development Minister David Parker described the passage of the bill as a "significant milestone".

"This government believes that New Zealanders should not be outbid by wealthier foreign buyers," he said.

"Whether it's a beautiful lakeside or ocean-front estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market."

But opponents said the ban was unnecessary and would not fix any problem.

Foreign ownership and a housing shortage in New Zealand's bigger cities were prominent issues in the run-up to last year's election, which saw the end of nine years of rule by the conservative National Party.

New Zealand now has a centre-left coalition government led by Labour's Jacinda Ardern, the country's youngest female leader.

What's the bigger picture?

The ban follows fears that overseas buyers of homes were putting too much pressure on infrastructure and house prices.

Image copyright AFP Image caption Many foreigners are drawn to New Zealand's natural attractions such as Mount Cook

Chinese investors have been among the biggest and most active offshore buyers of property in the New Zealand market.

Also, some wealthy Americans - like Silicon Valley tech billionaire Peter Thiel - have become New Zealand citizens or have bought property in the country.

Average prices in New Zealand have risen more than 60% in the past 10 years, while in Auckland - the country's largest city - they have almost doubled.

However, the housing market has somewhat cooled in recent months.

In July, the median price for residential property nationwide was NZ$550,000 ($360,500; £284,000), according to data from the Real Estate Institute of New Zealand.

In June, about 82% of houses were bought by New Zealand's citizens or residents, with fewer than 3% of homes going to foreigners.</s>New Zealand’s parliament has banned many foreigners from buying existing homes in the country – a move aimed at making properties more affordable.

The ban only applies to non-residents. Australians and Singaporeans are exempt because of free-trade deals.

New Zealand is facing a housing affordability crisis which has left home ownership out of reach for many.

Low interest rates, limited housing stock and immigration have driven up prices in recent years.

No, only non-residents are affected by the Overseas Investment Amendment Bill, which was passed in a 63-57 vote on Wednesday.

They are now banned from purchasing most types of homes – but they will be able to make limited investments in new apartments in large developments.

Foreigners with residency status in New Zealand – as well as non-resident Australian and Singaporean nationals – are not affected by the ban.

New Zealand’s Trade and Economic Development Minister David Parker described the passage of the bill as a “significant milestone”.

“This government believes that New Zealanders should not be outbid by wealthier foreign buyers,” he said.

“Whether it’s a beautiful lakeside or ocean-front estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.”

But opponents said the ban was unnecessary and would not fix any problem.

Foreign ownership and a housing shortage in New Zealand’s bigger cities were prominent issues in the run-up to last year’s election, which saw the end of nine years of rule by the conservative National Party.

New Zealand now has a centre-left coalition government led by Labour’s Jacinda Ardern, the country’s youngest female leader.</s>New Zealand's parliament passed a law on Wednesday to ban many non-resident foreigners from buying existing homes, completing the Labour-led government's election campaign pledge.

Jacinda Ardern, New Zealand's popular 38-year-old prime minister, campaigned before September's election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.

"This is a significant milestone and demonstrates this government’s commitment to making the dream of home ownership a reality for more New Zealanders," Associate Finance Minister David Parker said.

Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, almost double in the past decade and rise more than 60 percent nationwide.

House price growth has tapered off in the past year in part due to restrictions imposed on lending by the central bank, which was becoming alarmed at the potential financial stability risk of an overheated market.

Figures released by the Real Estate Institute of New Zealand on Wednesday showed median house prices had slipped 1.8 percent to NZ$550,000 ($360,140) in July from the previous month, although they were still 6.2 percent higher than the same time the previous year.

The government slightly relaxed the proposed ban in June so that non-residents could still own up to 60 percent of units in large, newly built apartment buildings but would no longer be able to buy existing homes.

The International Monetary Fund called on the government in July to reconsider the ban, warning the move could discourage foreign direct investment necessary to build new homes.

Official figures suggest that the overall level of foreign home buying was relatively low - about 3 percent of property transfers nationwide.

However, the data did not capture property bought through trusts and also showed property transfers involving foreigners was highly concentrated in certain areas, such as downtown Auckland and the southern scenic hot spot of Queenstown.

The majority of overseas buyers were from China and neighbouring Australia, according to Statistics New Zealand.

"Is the ban wise or useful? We think it’s neither," said spokesman Dave Platter of Chinese real estate portal Juwai.com.

"Foreign buying ... tends to be focused on new development, making clear again that foreign investment leads to the creation of new dwellings. That's vital in a market with a housing shortage, like Auckland," he said.

The government has said the ban would not apply to Australians and has been negotiating with Singapore, whose free trade agreement with New Zealand allows foreign ownership, on whether to grant an exemption.</s>New Zealand's parliament has banned many foreigners from buying existing homes in the country - a move aimed at making properties more affordable.

The ban only applies to non-residents. Australians and Singaporeans are exempt because of free-trade deals.

New Zealand is facing a housing affordability crisis which has left home ownership out of reach for many.

Low interest rates, limited housing stock and immigration have driven up prices in recent years.
• US applications for New Zealand citizenship jump 70% after election
• The lure of New Zealand for jaded Americans

No, only non-residents are affected by the Overseas Investment Amendment Bill, which was passed in a 63-57 vote on Wednesday.

They are now banned from purchasing most types of homes - but they will be able to make limited investments in new apartments in large developments.

Foreigners with residency status in New Zealand - as well as non-resident Australian and Singaporean nationals - are not affected by the ban.

New Zealand's Trade and Economic Development Minister David Parker described the passage of the bill as a "significant milestone".

"This government believes that New Zealanders should not be outbid by wealthier foreign buyers," he said.

"Whether it's a beautiful lakeside or ocean-front estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market."

But opponents said the ban was unnecessary and would not fix any problem.

Foreign ownership and a housing shortage in New Zealand's bigger cities were prominent issues in the run-up to last year's election, which saw the end of nine years of rule by the conservative National Party.

New Zealand now has a centre-left coalition government led by Labour's Jacinda Ardern, the country's youngest female leader.

The ban follows fears that overseas buyers of homes were putting too much pressure on infrastructure and house prices.

Chinese investors have been among the biggest and most active offshore buyers of property in the New Zealand market.

Average prices nationwide have risen more than 60% in the past 10 years, while in Auckland - the country's largest city - they have almost doubled.

However, the housing market has somewhat cooled in recent months.

In July, the median price for residential property nationwide was NZ$550,000 ($360,500; £284,000), according to data from the Real Estate Institute of New Zealand.

In June, about 82% of houses were bought by New Zealand's citizens or residents, with fewer than 3% of homes going to foreigners.</s>The New Zealand government has banned the sale of existing homes to foreign buyers, saying New Zealanders were sick of being “tenants in our own land”.

Associate minister of finance David Parker said the ban would mean housing would become more affordable for locals, and supply would increase.

“We think the market for New Zealand homes and farms should be set by New Zealand buyers, not overseas buyers,” said Parker in an interview with 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.”

In a speech to parliament on Wednesday he said: “We should not be tenants in our own land.”

Only a quarter of adults in New Zealand own their own home, compared with half in 1991, and in the last five years homeless figures have increased, with some New Zealanders forced to live in cars, garages and under bridges.

A report by the Economist in 2017 found New Zealand had the most unaffordable house prices in the world, with prices in Auckland climbing 75% in the last four years, although the market has cooled in recent months.

The ban applies to all nationalities, except buyers from Singapore and Australia.

Parker said in the last economic quarter 10% of homes in the popular Queenstown Lakes District (where pay-pal co-founder Peter Thiel owns a multi-million dollar home) and 20% of homes in Auckland central were bought by foreigners.

A place to get away from it all

New Zealand has become a destination for Chinese, Australian and Asian buyers and has gained a reputation as a bolthole for the world’s wealthy, who view it as a safe haven from a potential nuclear conflict, the rise of terrorism and civil unrest, or simply as a place to get away from it all.

Land sales to foreign buyers boomed under the previous centre-right National government, 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.

According to the latest figures from statistics New Zealand, 3.3% of homes sold in the last quarter were to foreigners, with the bulk of the buyers Chinese, followed by Australians. Tax residents of the UK, US and Hong Kong were also among the biggest buyers of property.

Under the new legislation foreigners would still be able to purchase apartments in large-scale block developments off the plans, in an attempt to boost the overall housing stock for New Zealanders.

Parker says in places like the Queenstown Lakes, where US multi-millionaires Peter Thiel and Matt Lauer have purchased properties, the ban will induce construction companies to build more smaller, family-friendly homes.

However, under the new law Thiel would still be able to buy property in New Zealand. Thiel became a New Zealand citizen despite having spent only eight days in the country after he gained approval under the former government.

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

The ban on foreign ownership is at the heart of the government’s plan to tackle the housing crisis, as well as its commitment to build 100,000 affordable new homes in ten years, and increase social housing stock by 6400 homes in four years.

Economist Shamubeel Eaqub said although the government’s efforts were “better than nothing” they lacked ambition.

The foreign buyer ban would make it “cumbersome” for foreigners to invest in building new housing stock in New Zealand, and that could dissuade them from trying, meaning less homes and apartments could potentially be built, Eaqub said.

“The kind of property that billionaires buy is never going to be used for public or social housing. Locking out multi-million dollar buyers doesn’t mean developers will start building smaller, basic houses. There is never a market for poor people, it is not profitable to build houses for poor people. That’s the challenge.”

The opposition National party’s finance spokeswoman Amy Adams said the foreign buyer’s ban was “xenophobic”, and said it had already sent a chill through the international business investment community, with business confidence falling to its lowest level since 2008.

“The government has put this up as some sort of panacea to the issue of housing affordability in New Zealand, but the evidence is that it is likely to make the problem far worse,” she said.</s>The new law, which was passed yesterday, is part of a plan to bring down house prices and boost home ownership in the country.

The move fulfills an election campaign pledge by the Labour Party-led government, which came to power last year.

"We believe it's the birth right of New Zealanders to buy homes in New Zealand in a market that is shaped by New Zealand buyers not by international price pressures."

Previously the housing market was open to investors worldwide.

Opposition lawmakers have said the bill is unnecessary.

"So this bill in many ways is like using a hammer to try and crush a teeny weeny little nut because it is about saying that every house, every residential house, is now apparently sensitive land,"

The new law fulfills a campaign pledge by the Labour Party-led government which came to power last year.

There are some exceptions to the new rules, including people from Australia and Singapore who will typically still be able to buy New Zealand homes thanks to existing free-trade agreements.

Foreigners who already own homes in New Zealand will not be affected.</s>In an attempt to regulate and stimulate the local housing market, New Zealand has taken a bold step in banning the sale of homes to foreign buyers.

According to proponents of the foreign buying ban, housing prices in New Zealand have skyrocketed beyond the means of average citizens. This unaffordability has led to the lowest rates in local home ownership, and the highest rate of homelessness, in over 50 years.

The new homeownership law, first reported on by The Independent, has been welcomed by politicians and residents – but economic analysts have warned that disallowing foreign buyers from entering the housing market may stifle growth.

The Overseas Investment Amendment Bill passed its final parliamentary hurdle on Wednesday and will come into effect in two months time.

Statistics, used to exemplify the current housing crisis within the country, point to New Zealand having amongst the highest cost of housing in the world compared to residents’ total income.

This imbalance has resulted in only a quarter of New Zealand’s adult population owning property. Housing costs in the country have ballooned more than 60% in the last decade.

The worst affected cities are Queenstown and Auckland – the latter owing 22% of its housing market to foreign interests.

David Parker, New Zealand’s associate finance minister, commented on the progressive piece of legislature, saying:

“We’re here today to take another step toward restoring the great New Zealand dream of home ownership. This government believes that New Zealanders should not be outbid by wealthier foreign buyers. Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.”

While the new bill prohibits foreigners from owning homes in New Zealand, there are some noteworthy exceptions.

Namely, foreigners with New Zealand residency status will still be allowed to buy and sell property. This also extends to people from Australia and Singapore, owing to existing free-trade agreements.

Further exceptions include foreigners who already own property in New Zealand.</s>WELLINGTON, New Zealand — New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices.

The government on Wednesday passed legislation that allows only New Zealand residents to buy homes as it attempts to improve housing affordability and increase the rate of home ownership.

Previously the housing market was open to investors worldwide. The new law fulfils a campaign pledge by the liberal-led government which came to power last year.

There are some exceptions to the new rules. Foreigners who live in New Zealand and have residency status will still be able to buy homes, as will people from Australia and Singapore thanks to existing free-trade agreements.

Foreigners who already own homes in New Zealand won't be affected.

Opposition lawmakers say the bill is unnecessary.</s>In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on Wednesday, Aug. 15 passed legislation that allows only New Zealand residents to buy homes as it attempts to improve housing affordability and increase the rate of home ownership. less

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on ... more

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on Wednesday, Aug. 15 passed legislation that allows only New Zealand residents to buy homes as it attempts to improve housing affordability and increase the rate of home ownership. less

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on ... more

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on Wednesday, Aug. 15 passed legislation that allows only New Zealand residents to buy homes as it attempts to improve housing affordability and increase the rate of home ownership. less

In this Aug. 13, 2018, photo a house is pictured for sale in Christchurch, New Zealand. New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices. The government on ... more

WELLINGTON, New Zealand (AP) — New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices.

Previously the housing market was open to investors worldwide, but the government on Wednesday passed legislation that allows only New Zealand residents to buy homes.

In recent years, there have been many anecdotal stories of wealthy foreigners from Silicon Valley and beyond buying ranches in picturesque rural New Zealand as a "bolt hole" or escape option from a turbulent world.

There have also been stories of wealthy Chinese buyers outbidding New Zealanders on suburban homes in the main city of Auckland.

Statistics indicate about 3 percent of New Zealand homes are being sold to foreigners, but the amount rises to 5 percent in the scenic Queenstown region and 22 percent in central Auckland.

Last month, the directors of the International Monetary Fund executive board said they encouraged New Zealand to reconsider the ban, which they thought would be unlikely to improve housing affordability.

But the government says there is no doubt that foreigners are driving up prices, and the only question that remains is by how much. The new law fulfils a campaign pledge by the liberal-led government which came to power last year.

There are some exceptions. Foreigners with New Zealand residency status will still be able to buy homes, as will people from Australia and Singapore, thanks to existing free-trade agreements.

Foreigners who already own homes in New Zealand won't be affected. And overseas buyers will still be able to make limited investments in large apartment blocks and hotels.

"We're here today to take another step toward restoring the great New Zealand dream of home ownership," said Associate Finance Minister David Parker.

He said it was the birthright of New Zealanders to buy homes at a fair price.

"This government believes that New Zealanders should not be outbid by wealthier foreign buyers," Parker said. "Whether it's a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market."

Opposition lawmaker Judith Collins said the bill was unnecessary.

"We oppose the bill because we don't believe that it actually fixes any problem," Collins said. "It is, in fact, nothing more than an attempt to justify some of the policies of the incoming government."

Skyrocketing home prices in Auckland have been of particular concern to New Zealanders, although that market has cooled over the past year. Still, prices there remain among the most expensive in the world when compared with people's incomes.

Figures released Wednesday by the Real Estate Institute of New Zealand indicate the median house price in Auckland is 835,000 New Zealand dollars ($547,000) while the median price across the country is NZ$550,000 ($361,000).

In June, officials decided that former "Today" show host Matt Lauer could keep a lakeside ranch near Queenstown after authorities concluded there wasn't enough evidence he'd breached a "good character" condition.

Lauer has been accused of sexual misconduct by at least three women and was fired from NBC last November.</s>WELLINGTON, New Zealand — New Zealand has banned most foreigners from buying homes as it tries to tackle runaway housing prices.

Previously the housing market was open to investors worldwide, but the government on Wednesday passed legislation that allows only New Zealand residents to buy homes.

In recent years, there have been many anecdotal stories of wealthy foreigners from Silicon Valley and beyond buying ranches in picturesque rural New Zealand as a “bolt hole” or escape option from a turbulent world.

There have also been stories of wealthy Chinese buyers outbidding New Zealanders on suburban homes in the main city of Auckland.

Statistics indicate about 3 percent of New Zealand homes are being sold to foreigners, but the amount rises to 5 percent in the scenic Queenstown region and 22 percent in central Auckland.

Last month, the directors of the International Monetary Fund executive board said they encouraged New Zealand to reconsider the ban, which they thought would be unlikely to improve housing affordability.

But the government says there is no doubt that foreigners are driving up prices, and the only question that remains is by how much. The new law fulfils a campaign pledge by the liberal-led government which came to power last year.

There are some exceptions. Foreigners with New Zealand residency status will still be able to buy homes, as will people from Australia and Singapore, thanks to existing free-trade agreements.

Foreigners who already own homes in New Zealand won’t be affected. And overseas buyers will still be able to make limited investments in large apartment blocks and hotels.

“We’re here today to take another step toward restoring the great New Zealand dream of home ownership,” said Associate Finance Minister David Parker.

He said it was the birthright of New Zealanders to buy homes at a fair price.

“This government believes that New Zealanders should not be outbid by wealthier foreign buyers,” Parker said. “Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.”

Opposition lawmaker Judith Collins said the bill was unnecessary.

“We oppose the bill because we don’t believe that it actually fixes any problem,” Collins said. “It is, in fact, nothing more than an attempt to justify some of the policies of the incoming government.”

Skyrocketing home prices in Auckland have been of particular concern to New Zealanders, although that market has cooled over the past year. Still, prices there remain among the most expensive in the world when compared with people’s incomes.

Figures released Wednesday by the Real Estate Institute of New Zealand indicate the median house price in Auckland is 835,000 New Zealand dollars ($547,000) while the median price across the country is NZ$550,000 ($361,000).

In June, officials decided that former “Today” show host Matt Lauer could keep a lakeside ranch near Queenstown after authorities concluded there wasn’t enough evidence he’d breached a “good character” condition.

Lauer has been accused of sexual misconduct by at least three women and was fired from NBC last November.
New Zealand's parliament votes to ban the sale of homes to non-resident foreign nationals amid a housing affordability crisis. Australians and Singaporeans are exempt due to free-trade deals.