25 Jan 2018

Realtors report spike of interest ahead of foreign ban

7:47 am on 25 January 2018

A large Chinese real estate website has seen interest in New Zealand property jump by over a third as buyers rush to secure it ahead of a ban.

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Photo: RNZ / Richard Tindiller

Under a law change being considered by Parliament, non-New Zealand residents will not be able to buy existing houses or other pieces of residential land.

In December, Chinese real estate portal Juwai began a large marketing campaign to help foreign buyers get a foot on the New Zealand property ladder before they are shut out.

Spokesperson Dave Platter said the campaign had been a success among Juwai's two million monthly users.

"Since we've been running the campaign and comparing it to November, the period just before the campaign, we've had a 35 percent increase in buyer demand or buyer inquiries for New Zealand property."

The Overseas Investment Amendment Bill - introduced in December and now before a select committee - reclassifies residential land as sensitive under the Overseas Investment Act.

It means most overseas investors will not be able to buy homes unless they build new houses on the land as well.

The ban must be in place before the new TPP comes into effect, because the deal rules out any new restrictions on foreign ownership.

The government had planned to have the law in place by the start of the year.

However, with the Bill still making its way through Parliament, Juwai has extended its campaign through February and could see further interest, Mr Platter said.

"This year Chinese New Year is in the middle of February ... so a lot of Chinese, especially for higher income levels who travel for Chinese New Year, might combine property hunting with their trip - so this is a period in which a lot of buyers would be doing their research and starting to talk to agents and start to look at property online."

Harcourts chief executive Chris Kennedy said in the past 90 days their website had around 250,000 foreign users compared with 200,000 over the same period last year.

"There will be a little bit of pressure coming on from foreign ownership to settle perhaps prior to the government locking down their overseas investment amendments so there will be a degree of increase," he said.

But other property agents said the effects of a looming ban were minimal.

The website, realestate.co, nz said its international traffic over December and January to date had remained the same as last year, at around 16 percent of all traffic, with Chinese visitor numbers actually going down.

Real Estate Institute head Bindi Norwell said December sales figures overall were down and past research had shown foreign buyers usually only made up about four percent of sales.

"I don't expect to see a huge amount of impact because it is such a small proportion of the market overall but I guess we have heard a few stories here and there anecdotally across the country that people are trying to get their transactions completed prior to any change occurring with the law," she said.

NZ Realtors Network chair and owner of Tommys Hutt Valley, Mark Coffey, said he had had several Chinese buyers but had not been inundated.

"We have ... seen what I'd call a small blip," he said.

"We've had some personal involvement in a couple of transactions, which in itself is unusual enough for us, with a couple of overseas-based buyers buying a couple of properties recently in the last month specifically to head off the door closing on that opportunity."

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