The New Zealand government has banned the sale of existing homes to foreign buyers, saying New Zealanders were sick of being “tenants in our own land”.
The move comes after a spate of millionaires seeking luxury doomsday boltholes has apparently crowded out local buyers and pushed up property prices.
Purchases by rich expats include tech billionaire Peter Thiel – PayPal founder and early Facebook investor – and former NBC host Matt Lauer.
New Zealand’s allure for the mega-rich planning a safe space to ride out the apocalypse has been a rising trend in a country with rates of homelessness that are among the highest in the developed world.
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.
Prime Minister Jacinda Ardern campaigned before September’s election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.
“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.
Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city Auckland almost double in the past decade and rise more than 60% nationwide.
However, 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.
Most foreign buyers in New Zealand don’t state where they’re from, official data shows, but the majority of those who do are from China.
The new law doesn’t apply to Australian and Singaporean buyers because of existing arrangements between the countries.