NZ government rebuffs calls for register of foreign homebuyers

By Xinhua in Wellington | China Daily | Updated: 2014-12-05 08:21

The New Zealand government rebuffed moves to start a register of foreign homebuyers on Thursday after earlier appearing to soften on the idea in response to Australian moves to record overseas buyers.

Opposition parties claim overseas investors are helping to drive a crisis in house prices, particularly in the largest city, Auckland, where prices shot up in some areas by 5 percent in the three months to the end of November, according to valuation agencies.

On Thursday, the opposition New Zealand First party introduced a bill in Parliament to establish a Foreign Ownership of Land Register, but it was knocked back by the government.

New Zealand First leader Winston Peters said the government was "running scared" of gathering data because it was obsessed with allowing foreigners to buy homes and land, but did not want the public to know the numbers.

"Too often the prime minister (John Key) has claimed the percentage of foreign ownership is low. Of course he has no idea because no one counts the sales," Peters said.

While Australia restricted foreign buyers, its watchdog had failed to monitor sales resulting in a recent report by the Australian Parliament, recommending a register to record the citizenship and residence of homebuyers as well as tougher penalties for avoidance.

On Wednesday, New Zealand Deputy Prime Minister Bill English said the government was looking at the Australian moves and was "open-minded about whatever gives you more information", the New Zealand Herald newspaper reported.

But on Thursday, Local Government Minister Paula Bennett, speaking on behalf of Building and Housing Minister Nick Smith, told Parliament that Smith did not favor a register.

"For it to be accurate, it would need to trace not only the 80,000 houses per year that are sold but the 1 million-plus people who come and go from New Zealand. That is because a significant number of overseas homeowners are people who are in the process of gaining residency, and for the register to be accurate, it would need to raise people's immigration and residency status," Bennett said.

She said English had also stressed that a lack of housing supply, particularly in Auckland, was the main problem, and freeing up land would have the biggest influence on house prices.

The Reserve Bank of New Zealand has repeatedly warned that the overheating housing market is a risk to the country's financial stability.

In October last year, it introduced tighter loan-to-value ratios on mortgages to curb demand in a move critics say has shut out first-homebuyers and this year, it has raised its official cash rate a full percentage point to 3.5 percent, further squeezing homebuyers.

On Wednesday, the leader of the main opposition Labour Party, Andrew Little, called for New Zealand to follow Australia's moves in order to prevent the dream of homeownership becoming a "speculator's plaything."