New Zealand’s new Labour prime minister elect has banned non-resident foreigners from buying existing homes anywhere in the country in a bid to address a shortage of affordable housing.
PM-elect Jacinda Ardern, who is coming to office thanks to a coalition led by the Labour party she leads, says her country is “no longer for sale” adding “We have agreed on banning the purchase of existing homes by foreign buyers.”
In an interesting parallel with the current complexion of the British Labour leadership, Ardern has in the past gone on the record as saying the capitalist system was a "blatant failure" in the provision of homes.
Foreign ownership and the housing shortage in some New Zealand cities were key issues in the campaign ahead of the September 23 election; in the past month a coalition has been formed between Labour, the Green Party and a party called New Zealand First.
Knight Frank’s summary of global house price rises found the annual increase in NZ was 10.4 per cent; the Real Estate Institute of New Zealand reports that prices in the capital city, Wellington, have risen 18.1 per cent in the past year.
Property consultancies have given stark warnings of how the new government’s policies may impact on the housing market.
On New Zealand news website Stuff the economist Nick Tuffley says the Labour pledge to stop the off-setting of rental property losses against their other income, and to increase the liability of capital gains tax on investment property resales, could hurt the market.
"There's a degree of uncertainty largely for property investors, they're facing the potential for tax changes that come through to make property investment less attractive. What that suggests is, in the short-term at least, property investors will remain cautious" he says.
The research head of consultancy CoreLogic, Nick Goodall, says prices may be stagnant for six to 12 months as investors assess whether to stay in or leave the housing market.
In Britain, measures ranging from higher taxation to an outright ban on overseas buyers have been advocated in the past from a range of groups including right-wing think tank Civitas; a study commissioned by London Mayor Sadiq Khan found that overseas buy to let investors bought 3,600 new build homes in the capital between 2014 and 2016, many appropriate for first time buyers.