An economist says it will take much more than a ban on foreign buyers to fix New Zealand's housing market.
Housing Minister Phil Twyford said when Australia banned investors buying existing homes, $30 billion was poured into new housing.
He said he hoped the same would happen here, as the new regulations would still allow investment in new homes.
The new rules were expected to be in place by February.
The economist Shamabeel Eaquab said in Australia similar legislation helped create a building boom in Melbourne that had cooled the market.
"For New Zealand I think it makes sense for us to follow because we simply can't keep up with population growth and demand growth, and taking away a little bit of demand at the margin will help, but this is not going to be the panacea."
Estimates suggest only a small number of foreigners buy houses here, Mr Eaquab said.