Government set to ban Johnny Foreigner from housing

The housing market is already tanking in Auckland, and now the government wants to ban ALL foreign buyers from the market.

The government will introduce legislation tomorrow to ban foreigners from buying existing houses.

That will mean overseas buyers will have to build new homes if they want to purchase property.??

Or they will create a company, and the company, which is a NZ entity will buy the house…that is just one way around their stupid law.

Housing Minister Phil Twyford said foreign buyers were pushing first home buyers and families out of the housing market.

“This government prioritises home ownership and housing affordability for all New Zealanders.

“This Bill will ensure that house prices are set by New Zealand-based buyers, not international buyers,” Mr Twyford said.

Except Kiwis with chinky sounding names. It was Phil Twyford who pimped that story to media, despite evidence to the contrary.

People in the country on temporary visas would not be allowed to buy existing homes, while some on resident visas would have to pass new screening tests.

The rules don’t apply to Australians and Mr Twyford said negotiations were ongoing with Singapore because the law change would breach an existing trade deal.

“Ultimately, if we were unable to reach agreement with Singapore on that, Singapore could be exempt through the regulations in the same way that Australia will be.”

Land Information Minister Eugenie Sage said the legislation brought residential land within the category of sensitive land in the Overseas Investment Act.

“It will mean, for practical purposes, that foreign buyers will not be able to buy residential property unless they are either increasing the number of residences and then selling them or converting the land to another use.”

They would need to be able to show that it would wider benefits to the country, she said.

A condensed select committee process will be held next year before the bill is passed into law.

It won’t work if the intention to to stop Johnny Foreigner buying houses. As I said above, they will just form a company and buy the house that way.

Phil Twyford is going to find out in a year what this policy has done though. It will constrain the market, remove buyers and tank the market. But it won’t stop foreigners owning property if they really want to.

There will be many home owners in Auckland who will get a massive haircut, and so long as they can keep paying their mortgage they will be alright…that is until the bank trots along and demands a contribution to bring their loan ratios in line. Then the carnage will start. You will see people crying on television as the banks start forcing mortgagee sales.

Sensible journalists would be asking major lenders what their predictions are for the next two years. I’ve been told by very senior sources that at least two major banks are over exposed on residential lending, and are already moving to sort their book out. One of those banks is in a parlous state. I’ve also been told that the banks are planning on interest rates approaching 9% and more than 100,000 mortgagee sales in the next 18 months.

If that comes true then Labour’s already lacklustre poll ratings will plummet further.


-Radio NZ