CNN reports that the Parliament of New Zealand on Wednesday passed a law banning foreigners from buying into most parts of its residential property market as the government seeks to cool red-hot house prices.
The Overseas Investment Amendment Bill will prevent overseas investors from purchasing existing properties in New Zealand, but they will still be able to buy into new apartment complexes and certain other parts of the housing market.
New Zealand Prime Minister Jacinda Ardern campaigned on a promise to clamp down on foreign buyers, blaming them for soaring prices that have left many New Zealanders unable to enter the property market.
“If you’ve got the right to live in New Zealand permanently, you’ve got the right to buy here,” Trade Minister David Parker said during a final debate on the bill Wednesday. “We believe it’s the birthright of New Zealanders to buy homes in New Zealand,” he added.
Public policy firm Demographia regularly ranks Auckland, New Zealand’s biggest city, as one of the world’s least affordable places to buy a home.
House prices have almost doubled over the past decade, according to central bank data, and are up more than 5% so far this year. Home ownership rates among New Zealanders have also been falling in recent years.
But government data suggests that foreign buyers actually only make up a small part of the country’s housing market. According to the latest official statistics, purchasers who don’t hold New Zealand citizenship or residency make up less than 3% of total transactions.
