3 per cent of NZ house sales to foreigners

Only just over 3 per cent of houses sold or transferred in the March quarter went to foreigners, Stats NZ data shows.

Of the properties which transferred to new ownership in the three months, 3.3 per cent went to people who were not citizens or residents, up from 2.9 per cent in December.

That includes not just sales but transfers of ownership due to a death, marriage settlement or other administrative changes.

“This increase was driven by a fall in the total number of transfers, and a small rise in the number of transfers to overseas people,” property statistics manager Melissa McKenzie said.

“The proportion of overseas sellers also increased in the March quarter, to reach 1.5 per cent, after staying steady at 1.3 per cent for a year.”

Economic development minister David Parker said because the rate of sales by foreign owners was lower than the purchase rate, the share of homes in foreign ownership was increasing.

He said the housing stock should be a New Zealand asset, not an international one.

“This is a growing problem in New Zealand borne of the concentration of wealth occurring around teh world in a small percentage of the global population who have captured most of the wealth generated in recent decades.”

Nearly 33,000 homes were transferred in the March 2018 quarter. Almost four in five of these were transferred to at least one New Zealand citizen. The other one in five were transferred to corporate entities, resident-visa holders, and overseas people.

“These figures are very close to the numbers that REINZ released at the back-end of 2017 which indicated that only 3.8 per cent of sales were to offshore buyers. In our view, the figures from Statistics NZ confirm that it’s not worth going ahead with a blanket ban on foreign buyers across New Zealand,” said Real Estate Institute (REINZ) chief executive Bindi Norwell.

“As we outlined in our submission to the Select Committee, if foreign buyers are banned from purchasing property in New Zealand, it could significantly impact development funding which would therefore impact supply and potentially see prices increasing – the exact opposite effect the ban is seeking to have.”

In the March 2018 quarter, nearly 10 per cent of all home transfers were to corporate entities, excluding most trusts. Information on the ownership of these entities is not currently available.

The territorial authority with the highest proportion of home transfers to people who weren’t New Zealand citizens or resident-visa holders was Queenstown-Lakes district (9.7 per cent), followed by Auckland (7.3 per cent).

Including homes, land, and commercial property, 4.3 per cent of all property transfers involved at least one buyer with overseas tax residency in the March 2018 quarter.

The tax residency status for a further 41 per cent of transfers was unknown.

“Many buyers and sellers are exempt from providing tax details if they’re transferring their main home,” McKenzie said.

“However, citizenship and visa information is required for nearly all transfers, excluding a small number of transfers such as Māori land transfers and Treaty of Waitangi settlements.”

Tax residency is not the same as nationality. An overseas tax resident may be a New Zealand citizen living overseas. Alternatively, a New Zealand tax resident could be an overseas citizen who lives in New Zealand, or a company with overseas owners.