The Key Government should follow Australia’s lead and tighten foreign investment rules around housing in order to make housing more affordable for New Zealanders, said Green Party Co-Leader Dr Russel Norman.
The Australian Government is re-introducing restrictions on foreign ownership of housing. The restrictions mean that foreign citizens must get Foreign Investment Review Board permission to buy housing and must sell the property when they leave.
“Foreign investors have contributed to the speculative bubble in housing prices in Australia and New Zealand over the last five years. This has made housing expensive and inaccessible for ordinary New Zealanders,” said Dr Norman.
“The danger to New Zealand is that if Australia tightens rules on foreign investment in housing, investors may head to New Zealand with our open door foreign investment policy.
“We need to tighten rules around housing and land in order to help make housing more affordable for New Zealand citizens and residents.”
Dr Norman is concerned that if the Key Government fails to act home ownership will continue to be a pipe-dream for the vast majority of New Zealanders under 40.
Figures from the 2001 and 2006 Census show that for those aged under 40, there has been a decline in the proportion of usual residents who owned the dwelling they lived in from 30.2 percent in 2001 to 27.0 percent in 2006.
The Government has announced that it will make changes to the tax treatment of investment property in the up-coming Budget.
“Changing the rules around investment property may assist our overinflated housing market,” said Dr Norman.
“But this will be tinkering at the edges of the problem if we don’t commit to building more state houses and tightening the rules that allow overseas citizens to speculate in the New Zealand real estate market.”