In a move following suite with it's sister country Australia, New Zealand has banned foreign buyers from purchasing homes in the country in order to combat soaring property prices. Jacinda Ardern, the Prime minister-elect of New Zealand, has specified the ban will only apply to non-residents.
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<span style="margin-top:15px;rgba(42,51,6,0.7);font-size:12px;">Credit: Nick Perry</span>
The move is a last ditch effort to balance low interest rates, limited housing stock and immigration which have worked in tandem to drive the prices of property in the beautiful country way up. The problem is exasperated by foreign ownership and a shortage of housing in New Zealand's bigger cities.
Both topics were hot issues in the September election which ended a 9 year ruling streak by the conservative National Party. Prime minister-elect Ardern said, "We have agreed on banning the purchase of existing homes by foreign buyers." She has also promised to slash immigration and focus on creating jobs for the country's citizens, something we saw help recent presidential nominee in America Donald Trump achieve victory.
The largest foreign buyers in New Zealand have been Chinese investors seeking the properties as low interest investments. Strong immigration has also fueled housing prices in the small nation of just 4.6 million people. The housing prices in New Zealand are among the highest in the world. Prices in the capital Wellington climbed 18.1% in just the year leading up to June 2017.
Recent data from the Real Estate Institute of New Zealand shows the average cost for a residential property in Auckland is $845,000.
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