13 Jul 2015

No back down over Chinese buyer claims

8:21 pm on 13 July 2015

The Labour Party is not backing down over claims Chinese buyers are pushing up Auckland house prices despite accusations it is being racist.

Phil Twyford being interviewed over housing by Jane Patterson 5/5/15

Labour's Phil Twyford said the figures strongly suggested overseas buyers were driving Auckand's skyrocketing property market. Photo: RNZ / Alexander Robertson

The party has been criticised for using three months of data from an Auckland real estate agency to infer overseas Chinese are spending big on property.

The party's housing spokesperson, Phil Twyford released a real estate firm's sales data showing almost 40 percent of buyers in the three months to the end of April had Chinese names, on the weekend.

The party said, with Chinese-New Zealanders making up only 9 percent of Auckland's population, the figures implied foreign investors from China were ramping up Auckland's house prices.

Mr Twyford said he had no regrets raising the matter and warned Chinese investors could spend up to $16 billion on Auckland property over the next ten years.

"This is a vital public debate that we need to be having in New Zealand about the impact of offshore investment on the housing market. Property speculation is rampant in Auckland. It is, I believe, one of the key factors behind skyrocketing house prices."

He said there was mounting evidence of the impact Chinese buyers were having on Auckland house prices in particular.

"Im talking about all of the international commentary and evidence about the wall of private Chinese investment that is moving into real estate markets, particularly around the Pacific Rim."

He said foreign investment in housing needed to be banned.

National MP, Nick Smith.

Building and Housing Minister Nick Smith Photo: RNZ / Alexander Robertson

Mr Twyford said that the data strongly suggested offshore buyers were a significant part of the housing problem.

"It's not credible to suggest that the 9 percent of the population of Auckland who are Chinese-New Zealanders could possibly have bought all those houses ... Nobody in the last three days has been able to put up a plausible alternative."

Since Mr Twyford released the figures he and Labour had been accused of being racists.

He denied the data analysis unfairly singled out New Zealanders of Chinese descent.

"Anybody, I think, listening to this debate - I hope - has realised that Labour is talking about offshore Chinese investors. We are not pointing the finger at Chinese-New Zealanders," he said.

"The evidence points overwhelmingly to the fact that there is a very significant presence of overseas Chinese speculators buying and trading houses for capital gain in Auckland.

"If people can't see that then they're not willing to address the problem."

A Chinese-New Zealand lawyer Arthur Loo, who deals with many Chinese buying houses in Auckland, disputed Labour's figures.

"The great majority of them are either living in New Zealand or have some connection to New Zealand.

"You know the number of people, you know, who lives in China somewhere and the only connection is the house that they bought, it's a tiny percentage," Mr Loo said.

But Mr Twyford was not so impressed by Mr Loo's numbers.

"Your lawyer that you're citing may well have lots of clients who are Chinese New Zealanders but it defies credibility to think that 9 percent of the population would be responsible for 40 percent of the property purchases.

"If you go down that line you have to ask so what happened to the other 91 percent of the population? Did they stay at home over that three months and not buy any houses?"

Mr Twyford does accept better statistics are needed.

"We wouldn't even be having this conversation if the Government wasn't in denial and they agreed to collect the data and share it with the public.

"But they refuse to do that. They refuse to set up a register of foreign property ownership. They refuse to make that information public," Mr Twyford said.

Housing claims 'crude racial profiling'

Greens co-leader Metiria Turei

Greens co-leader Metiria Turei Photo: RNZ

Building and Housing Minister Nick Smith said Labour was blaming one ethnic group for a region's housing troubles - with flaky data.

"I think it's pretty cheap politics from Labour to be targeting one ethnic group and blaming them.

"I've seen it before in politics with jobs, seen it before with crime, see that Labour is now effectively blaming Chinese for the housing problems."

Green Party co-leader Metiria Turei said, while Labour's information was interesting, Mr Twyford was making massive assumptions about people's identities.

"You can't use those stats he's got to make the claims he's making... It's a pretty crude piece of racial profiling."

Ms Turei said the issue, of how much offshore foreign speculation in the residential housing market reduced access to New Zealand families to buy a home, was real.

"We do know that there is...offshore foreign speculation in the housing market and we need to take every action we can to dampen that speculation and restricting foreign ownership is one way."

As well, Mrs Turei said the Greens would introduce a capital gains tax to discourage property speculation by domestic investors.

Others believed Labour was simply shining a light on foreign investors, an issue the country needed to debate, and that cries of racism did nothing to help.

David Seymour talking on Northland by-election.

David Seymour Photo: RNZ / Alexander Robertson

New Zealand First leader Winston Peters said his party was blasted as xenophobic and racist when it raised the problem of overseas buyers.

"We've been saying for a long time that the housing problem in Auckland is one of supply, and when it comes to supply what's exacerbating it, well massive demand inflated from abroad and offshore buying," Mr Peters said.

"That's the fact and trying to deny it is just drivel."

ACT Party leader David Seymour, who is the MP for Epsom in Auckland, said he would not be surprised if foreign buyers from China were disproportionately inflating the Auckland housing market.

"I think that that, in so far as it goes, is true. However, I do not believe it is good for New Zealand to make the housing debate a race debate, when it is so clearly a question of the Auckland property market failing to perform, failing to supply housing - and I lay that squarely at the door of the Auckland Council," Mr Seymour said.

Australian housing rules 'should be starting point'

The chief economist from BNZ says New Zealand should follow in Australia's footsteps, and ban selling houses to all foreign buyers unless they decide to live in the country.

The BNZ's Tony Alexander said New Zealand should look at Australian laws as a starting point for managing foreign housing investment.

"First up, basically banning the sales of properties to foreigners apart from for Aussies (and Kiwis), and coupled with very effective implementation of the regime, which has been a problem in Australia."

He also said New Zealand should add qualifications allowing people to buy if they have been in the country for more than one year.

Mr Alexander said those buyers could be required to sell up when they left the country.

Mr Alexander said there was no data to show the true magnitude of overseas buying in New Zealand.

But he said as Chinese people became more wealthy and currency laws there were relaxed, their investment here will only grow.

Mr Alexander said the New Zealand hosuing market was so attractive because we have so few rules to go with it.

From October, the Government will begin collecting bank and tax details of people buying investment properties, including those from overseas.

It said this information would give it a better steer on the level of foreign property investment in New Zealand.

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