New Zealand house prices are rising because of Australians buying affordable homes Image credit: Bloomberg
Australians are one of the reasons why prices of homes are skyrocketing in New Zealand. A new research study shows Australians purchased more property in New Zealand than other foreigner.
The figures of the study raised alarm bells and prompted immediate action to keep house prices down. Some groups are calling for a ban on foreign purchases or impose a tax on top of the sale price.
According to chief economist for BNZ Tony Alexander, Australians make up most of the house purchases in New Zealand with 22 per cent. The Chinese come in second with 20 per cent and the British at 13 per cent of foreign purchases.
The survey conducted by BNZ-REINZ gathered information from real estate agents regarding their sales based on groups. The survey showed that about 8 to 9 per cent of house sales came from foreigners. While no exact numbers were given to show the total number of foreign purchases, Real Estate figures from last month showed a total of 7,714 sold properties.
If this trend in foreign house purchases continues and if 90,000 houses in New Zealand are sold every year, about 8,000 of those houses will be owned by foreigners.
Alexander expressed his concern over the situation if changes are not implemented. If the housing problem is related to the affordability of homes, special Auckland guidelines or minimum deposit rules will only make it worse for people who are short in cash but want to buy homes.
Possible law to ban foreign purchases on affordable homes
Alexander said that changes should be implemented to get the buyers out of the market which do not deserve to purchase affordable housing. He suggested a law that would make it illegal to make second property purchases. The law should also ban foreigners from buying affordable homes and force people to sell properties which they do not occupy. Some people own houses in New Zealand but remain unoccupied because they live elsewhere overseas.
Judith Taylor works for Select Property Finder focusing on Newcastle and knows why Australians prefer to buy homes in New Zealand. She was formerly a property specialist for Australia's Property Women and led a group of 40 Australians to purchase homes in 2009. Australians were interested in cheaper homes and want to learn more about the real estate market in New Zealand. Taylor also says Australian buyers were very happy with their homes in New Zealand.