Real estate agents say a ban on foreign buyers will do nothing to stem demand

Ardern expected the legislation would be introduced by Christmas and passed in the new year.

Real estate agents around the country say a ban on foreign investors in New Zealand has come two years too late.
The Government plans to classify all existing homes as "sensitive" under the Overseas Investment Act, blocking the path to purchase for buyers who are not New Zealand residents.

In Auckland, The Property Market director Antonia Baker said foreign buyers hadn't been an issue for years.

"Foreign buyers left our market the moment they needed to produce an IRD number and local bank account number, and that change was put in place two years ago," she said.

"That horse has already bolted and all that legislated change will do now is lock the stable door. She [Jacinda Ardern] is way too late but good on her, she gets the headline for it."

Baker said two years ago foreign buyers were visible in the market and would visit the country for a few days to buy a house.

"I can pinpoint it to the last listing I sold, it was a beautiful big house in Remuera which sold for over $2 million and 45 per cent of the inquiry were people who were not Kiwi nationals.

"If I were to take that property to the market now, I would guarantee that 45 per cent would not be there."

Wellington's Tommy's Real Estate director Nicki Cruickshank said foreign owners had no effect on the Wellington housing market, either.

"We track our buyers and in the last six months, 96 per cent of all properties were bought by local Wellington people and of the other 4 per cent only about 1 per cent might be overseas buyers."

She said Labour's ban on foreign buyers could possibly lead to a small bubble between now and Christmas with people buying before the law change.

"But overall pretty much no impact at all."

Both Cruickshank and Baker agreed the real issue was supply and demand and home loan restrictions.

"We always have a shortage of supply which is almost always keeping up the prices in Wellington," Cruickshank said.

She said the most in demand houses are now dropping in value.

"The sweet spot in the market used to be in the $750,000 to $1 million but now that trend has gone down to the $650,000 mark."

Baker said there was no housing crisis and the three issues she saw in the market were supply, home loans, and bank margins.

"Banking restriction have been a good thing but have made it a more considered process. It's up to people to decide whether they think that is a crisis.

"We are such a residential property-focused economy that it's created a bubble of learning around that product and Kiwis have become incredibly good at understanding the legislation.

"Buyers seem to be coming into the process a whole lot more educated than they were five years ago."