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The advert says the Auckland property scene is 'an investors dream, and very affordable'. File photo / NZ Herald
By: Patrice Dougan
Assistant Chief of Staff, NZ Herald
patrice.dougan@nzherald.co.nz @PatriceDougan
An Asian radio advert is boasting that property investors can get New Zealanders to "go to work for you and give you hundreds of dollars a week" in rent in Auckland's overheated property market.
The advert, aired amid '60s classic hits on Singaporean radio station 90.5 Gold, sells Auckland as "an investors' dream" with no land tax, stamp duty or capital gains tax.
And with the added bonus of Kiwis paying half their week's wages into an investor's pocket.
LISTEN TO THE ADVERT HERE:
It starts by asking listeners: "How would you like people in New Zealand to give you around half their weekly wages?"
"Now if you happen to own an apartment in Auckland, New Zealand, the high rent returns, other people's money - around half a week's pay for most people - could be paid to you as rent every week," the Kiwi man's voice continues.
"Now many people invest in Auckland because of the high demand for rents. There's no stamp duty, no land tax, and within New Zealand, generally no capital gains tax either. It's an investors dream, and very affordable.
"New apartments in the centre of Auckland can be purchased for as little as $390,000 -- that's right $390,000. And with as little as $2000 initial deposit you can secure one today for yourself as an investment."
It ends by asking interested investors to call a number "if the idea of having people in New Zealand going to work for you, giving you hundreds of dollars a week, paying for your apartment appeals to you -- and I'm sure it does".
A user on SoundCloud, who posted the audio of the advert, said it "encourages investment in to NZ -- for bargain basement rates that others cannot access".
News of the advert has prompted opposition parties to hit out at the Government, blasting an unregulated property market for creating an "open invitation to the world's property speculators".
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Labour's housing spokesman Phil Twyford claimed the Singaporean advert was also being played in Malaysia and Queensland.
"We can't blame overseas property companies or investors for Auckland's housing crisis. Why shouldn't they cash in on our Government's open invitation to the world's property speculators?," he said.
"The Government must take action in this year's Budget that will lead to more houses being built and clamp down on property speculators. Otherwise John Key's legacy will be a generation locked out of home ownership."
Green Party housing spokesman Kevin Hague said New Zealand was becoming an "easy mark" for overseas property speculators hoping to make a quick buck.
"These cashed-up non-resident buyers must think New Zealand and the National Government are easy marks," Mr Hague said.
"They can come here, score a bunch of properties, pay no capital gains tax and charge a premium for rent -- and they know John Key and his Government will do nothing to stop them.
"Meanwhile, young New Zealanders are having to pay those rapidly rising rents, and they're being completely priced out of ever owning their own homes."
He called on the Government to "urgently tighten our overseas investment laws to prevent this from continuing for years and years to come".
It comes off the back of a new affordability study which found Auckland was now 49 per cent less affordable that the rest of the country -- the largest gap in the Massey Home Affordability Report's 25 year history.
While figures from the most recent quarter -- December 2014 to February 2015 -- showed an improvement in affordability across New Zealand of 6 per cent, Auckland and three other regions bucked that trend.
"When you look at the past 12 months, houses in Auckland are now over 22 per cent less affordable while, for the country as a whole, the annual deterioration in affordability is only 10.4 per cent," report author Professor Paul Gallimore said.
"These figures underline the ongoing two-track housing experience of New Zealanders."
Over the past year the 10.4 per cent fall in affordability had been driven by a modest 3.6 per cent rise in house prices and a 0.5 per cent rise in interest rates, which outstripped the 2.3 per cent increase in the average weekly wage.
"But the situation in Auckland is quite different -- wages actually rose at less than the national average while the median house price rose by a substantial 14 per cent, or $83,000," he said.
"The recent improvement in affordability in many regions really accentuates the high costs in Auckland. Our largest city is now 49 per cent less affordable that the rest of the country - and that's a larger gap than we've had at any other time in the 25-year history of the Massey Home Affordability Report."
This divergence was likely to continue throughout 2015, he said.
* Annual deterioration in national affordability of 10.4 per cent.
* Quarterly improvement in national affordability of 6 per cent.
* Auckland is one of four regions -- alongside Otago, Nelson/Marlborough and Taranaki -- to show continuing declines in affordability over the last quarter.
* Auckland's unaffordability relative to the whole country is now at its highest level since the Massey index began.
* Least affordable region: Auckland -- 49 per cent more unaffordable than national average.
* Most affordable region: Southland -- 52 per cent more affordable than national average.
(Source: Massey Home Affordability Report)