- Foreign Minister Winston Peters indicated overseas buyers might be allowed to purchase property if they invest significantly in the economy.
- Peters criticised National’s pre-election policy to lift the foreign buyer ban for purchases over $2m, calling it “massively faulty” and ineffective in bringing expected funds.
- He emphasized the need for a careful framework to ensure investments benefit employment and exports.
The Deputy Prime Minister has hinted that the foreign buyer ban could be eased for overseas investors who want to pump millions of dollars into the New Zealand economy.
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In an interview with Mike Hosking on Newstalk ZB this morning, Winston Peters said plans to lift the foreign buyer ban in some shape or form were a “work in progress”.
The New Zealand First Leader rubbished National’s pre-election policy to allow overseas buyers to purchase properties for more than $2m, saying the figures were “massively faulty, didn’t work and didn’t bring the money they should bring”.
However, he did not rule out allowing overseas buyers to purchase property in New Zealand if they were prepared to invest in the country in some other way.
Queenstown-Lakes agents say they get regular enquiries from overseas buyers about homes in the wealthy enclave. Photo / Getty Images
“If someone has come to this country like they do to other countries and brings $50m to invest in a huge industry and to ensure that we’ve got employment where there’s no employment now, potential exports where there are no exports in this area now – then we will look at it certainly and that’s always been our view,” he told Hosking.
“Because that means you’ve got a serious investor committed to the New Zealand economy and [it’s] not just a bolthole in case they want to come here one day.”
However, Peters said it wasn’t as simple as just opening up the country and allowing anyone in to buy. Instead, it required some careful structural framework.
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“We are going to have to construct an economy, which answers the question why invest in New Zealand, and that has to be detailed and specific. And we are not selling ourselves out if you are investing in New Zealand and you are going to have a massive part in building our economy if homeownership, while you do that, is part of it. That rule doesn’t have to be automatic no, but let’s see the details first.
“I know that there are people with interest and the money to seriously start yesterday. We have to frame our country’s policies wisely like Ireland, like Croatia doing like a rocket now, like Singapore did and make some sense for New Zealand people. We’ve got the assets, we’ve got the people, we just haven’t got the structural framework.”
Ray White agent Ross Hawkins, who specialises in high-end listings, said it made sense that anyone investing in New Zealand’s economy should also be allowed to buy a house here. “It has to go hand-in-hand because anybody looking to put big money into setting up a business in New Zealand, they don’t want to rent a house, they want to own a house. They want their own base here.”
However, he said it perhaps should not just stop there and suggested introducing other exemptions such as allowing overseas buyers to buy properties $5m-plus or if it was a new build, which would spur development. “They should be doing it in a way that is creating jobs, creating growth and getting money into the country to support that.”
New Zealand Sotheby’s International Realty managing director Mark Harris supports changes that will make it easier for overseas buyers to purchase property in NZ. Photo / Supplied
Hawkins had been speaking with a range of wealthy overseas buyers for a few years now who wanted to come to New Zealand.
Some wanted to do business in New Zealand but weren’t because they didn’t own a property and others would like to buy a property and if they did, would likely set up businesses once they did, he said.
“It’s a bit of a chicken and egg thing where you’ve got to not only allow here if they are starting a business, but also have some timeframes on once they buy here then they are required to invest – rather than investing first.”
Agents told OneRoof last month that they believed that changes to the foreign buyer ban were being floated in Government. Some believed the revision of the Government’s Active Investor Plus Visa program early this year might include allowances for residential property.
New Zealand Sotheby’s International Realty managing director Mark Harris told OneRoof in January: “If you are a foreigner investing $15m into the Active Investor Plus program to obtain a NZ visa, an investment in a residential home could contribute towards qualifying.”
Harris, who wrote an open letter to the Government last year calling for changes to the foreign buyer ban, did not think there would be a price threshold for foreign purchases if they were incorporated into the Active Investor Program.
“The economy needs the investment and if [the changes] encourage them to invest in New Zealand companies and infrastructure, and to employ people, then that is a positive,” he said.
Bayleys agent John Greenwood told OneRoof last month he had noticed more Overseas Investment Office applications – particularly investment assets – being approved under the current Government.
“We are now quite confident that a strong application with all the right criteria in the plus $10m bracket will normally be processed,” he said.
“If somebody is wanting to invest $10m in a residential house in New Zealand, I would recommend that they actually apply because the Government is wanting offshore money – they are just not prepared at the moment to say that’s the case.
“Because that is not out there, we are only getting people looking who have some form of association with New Zealand – either through family, business or what have you.”
Barfoot & Thompson prestige agent Paul Neshausen told OneRoof: “I think just opening the doors for foreign investment in real estate for anything over $5m would be the catalyst that we need to get our economy going.”
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