Matt Harris joined us to break down the latest changes to the foreign buyers ban and what they could mean for New Zealand’s economy. While the headlines suggest a major shift, the reality is far more limited.
Why the Foreign Buyers Ban Was Introduced
The foreign buyers ban was created during the property booms of the 2010s, when pressure mounted to curb offshore buyers. Public perception was that foreign investors were driving up prices, especially at Auckland auctions, even though the data didn’t strongly support that view.
Matt Harris pointed out that many buyers assumed to be offshore were actually New Zealand citizens, but perception mattered more than fact. He compared it to Brexit in the UK, where decisions were made on how things looked rather than the reality. James Blair highlighted how the ban, once introduced, shut down foreign investment in housing with only narrow trade-based exceptions.
What the New Changes Actually Mean
The latest tweak allows investor category visa holders to buy homes worth more than $5 million. That covers only around 1% of the housing market – luxury properties and mansions, not everyday homes.
According to Matt, the change “lacks teeth” and has little impact on the broader economy. James suggested it feels more like a stepping stone, with the government testing public sentiment before opening the market further. While these transactions do create some flow-on benefits like rates, insurance, and maintenance, they’re unlikely to shift the dial for most New Zealanders.
The Bigger Picture for the Economy
New Zealand’s growth challenges go well beyond property. The country feeds 40 million people a year – eight times its own population – but continues to struggle with productivity and retaining skilled workers. Foreign investment, whether through housing or major projects like Amazon’s $7.5 billion data centre, can stimulate jobs, services, and tax revenue.
Matt argued that New Zealand’s reputation as a safe, stable, and desirable place to live gives it a unique edge in attracting overseas capital. James noted that loosening the foreign buyers ban could help position the country as a safe haven for investment, though politics remains the barrier to significant reform.
Key Takeaways
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The foreign buyers ban was driven more by perception than data during past property booms.
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Current changes affect only homes worth more than $5 million.
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Matt Harris believes the policy “lacks teeth” and has little real impact.
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James Blair sees it as a cautious step that could lead to wider reform.
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Both highlighted New Zealand’s potential as a safe haven for global capital.
Next Steps:
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Disclaimer:
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.
