New Zealand bans most offshore residential real-estate ownership

#1

Originally published at: https://boingboing.net/2018/08/15/hobbiton-for-hobbits.html

8 Likes
#2

The headline made me think people were buying land out in the ocean and building a floating house.

15 Likes
#3

Same. I thought “are they houseboat-shaming now?”

8 Likes
#4

Looks like the Shire is being pre-emptively scoured. So much for the plans of American tech billionaires who were counting on NZ as their bolthole after “The Event”. I’m sure that the locals will be very disappointed that they won’t be able to welcome these post-apocalyptic job creators.

9 Likes
#5

Unless NZ has changed its citizenship requirements to ban the superrich buying passports, they can just splash out on a nice shiny Kiwi passport then buy a property.

12 Likes
#6

good for them. foreign property investment has ruined the market in London and most major US cities.

15 Likes
#7

Hehe, take that Sharkey!

2 Likes
#8

At least they will have to pay income tax in NZ too (don’t they charge global income?)

2 Likes
#9

Pretty much - this is nice in theory, but in reality it just means that a Kiwi businessperson will just act as a middleman for all the money… Which might have been the purpose of the bill in the first place, essentially putting a small “manager tax” in the middle of the transaction, siphoning a bit off the top for the (1% of ) the locals.

3 Likes
#10

When I was there a few years ago, tour guides would point out huge sections of land or residential housing and say “all of this is owned by the Chinese, Kiwis can’t buy any of this land anymore.” I heard the same story in Australia. Glad both places are moving to curtail offshore land/real-estate speculation.

5 Likes
#11

Unlikely that’s the purpose, either stated or unstated. The same law in Australia has been successful in countering the runaway housing bubble they were experiencing due to offshore investment in property.

2 Likes
#12

That’s… Genuinely surprising, at least for an American that’s familiar with how business is done here.

I’m all for them blocking off the creation of a new housing bubble, I just can’t figure out how you’d prevent all the vast number of ways of channeling money into a potentially profitable investment.

The main explanation I can think of for it being effective is that it’s not so much preventing the investment as it is making it less profitable - all of the methods of channeling money have a cost, so that money just goes elsewhere until the lower-cost investments are saturated, then money starts creeping in again.

Or, as a metaphor, they laid a single row of sandbags around their house in a flood. The sandbags work until the water rises, and then you have to add more sandbags, or let the water in over the top. And of course you have people trying to sneak around behind you and remove sandbags, because they want the water inside, so you’re trying to prevent that, repair any damage they did, and still stay enough ahead of the tide that you don’t drown.

2 Likes
#13

I feel like we need radical rent control across-board for people (or corporations) who own properties in which they do not reside. I really don’t know enough about all the tax structures, various loopholes and all, but I know we need denser property at the heart of cities, especially those like mine who have boomed since the 1970’s and suffer from suburban sprawl. I have some ideas though. A maximum vacancy time of six months before it must rent for less, as well as aggressive taxation on investment property to make the whole prospect less attractive. We have a huge problem with the percentage of income spent on rent and I know it sounds nutty, but what if the rent caps were based on income, rather than what the elite end of the market will bear?

4 Likes
#14

China should build more ghost cities. At least with those the investors (usually) aren’t locking out people who actually need a roof over their heads.

1 Like
#15

I am not sure, but it seems to have had the desired effect in AUS? Well-crafted legislation might have anticipated the idea of the middleman purchase you described and included a statement such as “I swear that I am not buying this property as an agent of a foreign investor” in all real estate purchase agreements with significant penalties for lying about it.

1 Like
#16

The bill mirrors similar provisions in Australia, which coincided with a fall in housing expenses in that country.

Isn’t that the same thing as a fall in real estate value? Like it or not, won’t that impact bona fide homeowners?

#18

So?

If your home (and not-coincidentally everyone else’s home) falls in value, what does that matter?

The value only matters if you’re trying to cash out.

4 Likes
#19

Or if you’re looking for a line of credit. Or if your work requires you to move. Or…

1 Like
#20

… (and not-coincidentally everyone else’s home) …

2 Likes
#21

There’s truth in those tour guides claims but there’s also no denying that racism (and lack of statistical analysis) play a big part in public perception too.

Chinese make up the largest portion of overseas buyers with Australians the second largest but you hear little similar anti-Australian sentiment.

Interestingly Australia and Singapore are exempt from the latest restrictions due to the nature of certain trade agreements.

2 Likes