calls to ban australians buying nz property

Australians are the focus of growing discontent in New Zealand about cashed-up foreigners buying affordable housing.

The latest BNZ-REINZ Residential Market Survey shows that people in Australia represent 22 per cent of all foreign purchases in New Zealand, with people in China close behind at 20 per cent.

Bank of New Zealand chief economist Tony Alexander, who put the report together, has called for a ban on foreigners buying existing properties in New Zealand.

"At the moment it's open slather," he said. "There are no regulations on offshore purchases of residential property in New Zealand.

"My suggestion has been to adopt Australia's policy, where if you are a non-resident you can only buy something that is new, so at least you add to the supply."

The monthly survey by the bank and real estate lobby asked 10,000 licensed agents to identify where most of their offshore buyers were located.

Although the 22 per cent would include New Zealand expats, it is clear that Australia's close neighbour has become an investor hot-spot.

Houses in New Zealand are significantly cheaper than Australia and there is no stamp duty or land tax on property purchases.

Some Australians are doing well: one Aussie buyer bought a block of flats, unseen, for $NZ290,000 ($244,706) in the university town of Dunedin. It rents for $NZ780 a week – a gross rental yield of more than 13 per cent.

Agents Nidd Realty said it was just one of several investment properties purchased by the Australian.

While Mr Alexander said he did not believe foreign buyers were to blame for New Zealand's affordability crisis, he said a ban would be "useful in making people in New Zealand think about what are the actual causes of the price rises".

He put price rises down to supply constraints, expensive building materials and excessive building regulation.

Graeme Fraser from Ray White Auckland said the growing auction culture was fostering resentment against foreign buyers.

"The discontent is being fuelled by those who have gone to buy half a dozen properties and been unsuccessful," he said.

He said people felt they were being pipped at the post by Asian buyers.

"But there is no statistical evidence to show that there are more foreign buyers active in the market," he said.

Sydney-based Mary O'Brien from New Zealand Mortgage Solutions said she had noticed a jump in the number of Australians buying New Zealand property over the past two years, but only in certain areas.

Apart from Queenstown, which is popular with Australians on skiing holidays, she said Dunedin was being targeted for its solid rental returns.

Nidd Realty's Graeme Pennell said gross returns of 9 to 10 per cent were not uncommon.

"That's a lot better than money in the bank," he said.

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