Booming New Zealand Housing Market Blamed on 'Busload of Australian Women'

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By Reissa Su | May 12, 2014 3:57 PM EST

A "busload of Australian women" was identified as the reason for the increase in the sales of New Zealand's housing properties. The debate about foreigners owning more of New Zealand property has taken another twist in a televised panel discussion between minor political parties. Talks became heated when the issue was raised regarding policies restricting foreign ownership were motivated by racism or not.

John Minto from the Mana Party had led the protests in New Zealand against apartheid in South Africa during the 1980s. United Future leader Peter Dunne said the issue of foreign ownership was pointing to a "certain category of people" as the reason. Mr Dunne said to think about the historical context of the claims to which Mr Minto replied as "rubbish."

He said it's "a disaster for New Zealand" when a bus full of Australian women drive around the country and bought 2 to 3 houses each before getting on a plane. The buying activity will reportedly drive house prices up.

House prices up in New Zealand

In April, house prices rose 8.4 per cent, according to New Zealand government agency Quotable Value. The Reserve Bank of New Zealand has raised interest rates twice. To slow down the housing market, the RBNZ has also introduced a limit on loan-to-value on high debt lending.

Despite the struggle to control house prices, New Zealand's growth forecasts in the past six months continue to increase due to strong exports, post-earthquake reconstruction and export growth.  

The IMF has upgraded its economic growth forecasts for New Zealand in the last six months. The agency expects the New Zealand economy to grow at 3.3 per cent in 2014 and three per cent in 2015. The previous growth forecast was at 2.4 per cent.

According to Reuters, New Zealand's house prices continues to increase and have reached a new record-high in April.  The sharp rise for the third consecutive time has led to a drop in the number of houses sold.

The Real Estate Institute of New Zealand said the decline in house sales volumes especially in lower-priced properties was affected by the central bank's restrictions on low deposit lending and the beginning of the interest rate cycle. 

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