News of high numbers of property sales to Chinese ‘surnames’ has created a hot potato in political circles and it’s all the talk with property investors on PropertyTalk.com.
Depending on your point of view, clamping down on foreign ownership is either a necessity so Kiwis get into homeownership or the start of economic woes with our largest trading partner.
Labour Party Housing Spokesman Phil Twyford was responsible for releasing the data to the media. It was leaked to him a week ago by a Real Estate Agent who has since been fired. In today’s NZHerald Phil said:
I absolutely stand by releasing that data, New Zealand is being sold off under our feet.
Evidence suggests there are a number of causes for the state of the Auckland property market and all of them probably need addressing if we want the majority of Kiwis particularly in Auckland in homeownership by their mid thirties.
Some of the obvious causes have been addressed this year. RBNZ has done their bit with a 30 percent LVR restriction on rental properties bought in Auckland from October 2015 and the Government has stepped up too proposing a ‘bright line’ test on properties (excluding the family home) sold within two years.
Supply is the major cause and it’s become the focus of Dr Nick Smith. Land is being freed up for new homes however the challenge is ensuring the new ‘private’ land owners elect to develop on it rather than land bank.
Up to recently foreign ownership was not thought to be a major cause however the leaked sales data suggests in some areas of Auckland over two thirds of recent property purchases have been to people with Asian surnames while the percentage of Asians living in Auckland is just nine percent so question remains are the Chinese on a massive spending spree and helping to inflate the Auckland property market?
While we’re looking for answers and many of us are occupied with the ‘blame game’, wealthy Chinese businessman Donghua Lui is focusing on what he believes is the solution to Auckland’s property woes. His solution is supply. Build lots and lots of Apartments starting with $100M and a section in Newmarket.