14 Nov 2017

Foreign buyers set for rush to beat cutoff

7:40 pm on 14 November 2017

A large online Chinese real estate portal is launching a marketing campaign to help foreign buyers get a foot on the property ladder before they're shut out.

Foreign investors make up a small proportion of house buyers, so are not pushing up house prices - Housing Minister Nick Smith.

Foreign investors make up a small proportion of house buyers, so are not pushing up house prices - Housing Minister Nick Smith. Photo: RNZ / Diego Opatowski

The government wants to stop foreign speculators buying existing houses from early next year, but the planned ban could lead to Chinese investors fast-tracking plans their plans.

With more than two million Chinese-speaking users, Juwai acts as a bridge between sellers and foreign buyers.

Its head of Australia and New Zealand Jane Lu said the impending policy change would lead to an increase in interest in the next month or so.

"For the buyers who have been researching the market previously there was no time restriction, they may well have wanted to look around to find the perfect home as we all do. But with this policy change it does encourage them to act sooner just in case they might not be able to purchase in the future."

Next month the company will promote a New Zealand webpage for agents and property developers who want to raise their profile and advertise properties in China before the change.

"This campaign is really trying to assist those Chinese buyers who do have a real need to invest in New Zealand, whether because their children are studying in New Zealand or their families and relatives already live there and they're potentially looking to migrate there in the future."

With new builds exempt from the new ban, Jane Lu said interest from China in the New Zealand market would remain strong.

"We do believe, of course, with the new policy change it will ... push the overseas Chinese buyers into the new development sector.

"We're hoping the policies will not affect the Chinese buyer's interest in New Zealand ... I do believe for New Zealand's economy, Chinese investment is still a vital part."

New Zealand Property Solutions helps overseas buyers enter the market and director Lyndon Fairbairn said he had not yet seen any pickup in interest or sales yet - but expected there would be.

"Coming up through till Christmas time there'll be a definite rush, and through into January before Chinese New Year and probably around that time is when the new bill will come in. Enquiries and sales will probably just peter off a little then."

Many buyers were used to purchasing off plans and buying new so would not be affected, but there would likely be a marketing push from companies trying to reach the foreign investor market, Mr Fairbairn said.

"They just see there's an opportunity to get in and buy New Zealand property before they close doors on existing property and land, so there's going to be a lot more of it coming up."

In announcing the policy, Prime Minister Jacinda Ardern said the government wanted to stop foreign speculators buying houses and driving up prices.

Andrew King from the Property Investors Federation said even if there was a rush of foreign buyers, the impact of the policy would likely be marginal.

"Because foreign buyers don't make up a large percentage, they don't really have that much of an influence. Even if 50 percent of them go away, it's not going to have that much of an effect on the market overall.

"It's basically New Zealanders buying and selling that has the big effect."

While the market had flattened out after a raft of restrictions on investors in the last year, Ashley Church from the Property Institute did not anticipate much more movement under the new policy.

"If we were having this conversation two years ago when the market was at its height then there might have been an argument in favour of saying that there'd be some impact on prices to the extent that foreign investors were in the market. But they've pretty much disappeared, as have all buyers right now, so the market is quite flat.

"I wouldn't expect it to have much impact at all, so I think the imposition of this ban by Labour was more symbolic than economic."

The government expects legislation to be introduced before Christmas, taking effect early next year.

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