Foreign buyer ban linked to softening of the residential property market
The much-hyped foreign-buyer-ban of residential properties that came into effect in October 2018 is being linked with the softening of New Zealand’s residential property market.
A Stats NZ report released on Thursday, May 2 said that house sales to overseas buyers dropped by 81 per cent in the March quarter compared to the same time last year.
“Overseas people acquired just 0.6 per cent of homes transferred in the first quarter of 2019, reflecting law changes in late 2018 that introduced restrictions for overseas buyers,” property statistics manager Melissa McKenzie said.
Home transfers to people who didn’t hold New Zealand citizenship or a resident visa fell over 80 per cent in the March 2019 quarter compared with the same quarter a year ago, Stats NZ said today.
There were 204 home transfers to people who didn’t hold NZ citizenship or a resident visa in the March 2019 quarter, down 81 per cent from 1,083 in the March 2018 quarter.
Total home transfers fell 3.5 per cent over the same period.
Softening Auckland residential property market
CoreLogic Senior Research Analyst, Kelvin Davidson said, “It’s clear from today’s Statistics NZ figures that October’s Foreign Buyer Ban has cut into property demand from this source, and is likely to have contributed to the softening in values in areas such as Auckland and Queenstown.”
“Clearly, last October’s Foreign Buyer Ban has now taken full effect and there have been some pretty dramatic shifts in areas such as Central Auckland and Queenstown,” Mr Davidson said.
In Auckland, on a monthly basis, the share of homes transferred to no NZ citizens or resident visa holders varied from a high of 7.8 per cent in March 2018, down to 1.1 per cent in March 2019. On a quarterly basis, the number of homes transferred to that group went from 678 in the March 2018 quarter to 111 in the March 2019 quarter.
Earlier, a media report appearing in Radio NZ said that an Average Auckland house price has dropped by $100,000 over three years.
However, that does not automatically means that prospective first home buyers can easily get into the property market as other factors such as low affordability and tighter credit availability continue to play a significant role.
Nevertheless, Auckland property market continues to be a buyers’ market where indeed buyers and more specifically first home buyers are in a better position to shop around for a better deal than what they could have got with the same level of finances about three years ago.
"Listings are as high as they've ever been for the last 10 years in Auckland so you've got plenty of choices and it's definitely a buyer's market you can shop around and to some extend upgrade your location so I'd say it's definitely a buyer's market," Mr Davidson said.
Not all first home buyers are in a rush
However, not all first home buyers are in a rush to make a move and rather prefer to wait and see if they can expect more softening of the market once the impact of foreign property ban starts coming into play.
Mukesh Chand and Nandini - a prospective first home buyer couple - who have been in the market since last three months told the Indian Weekender, “We are targeting Takanini area in South Auckland and considering a few options.
“However, we believe there is merit in waiting for some more time and see if we could be luckier and get what we want in the money that we can afford."
The much-hyped foreign-buyer-ban of residential properties that came into effect in October 2018 is being linked with the softening of New Zealand’s residential property market.
A Stats NZ report released on Thursday, May 2 said that house sales to overseas buyers dropped by 81 per cent in the...
The much-hyped foreign-buyer-ban of residential properties that came into effect in October 2018 is being linked with the softening of New Zealand’s residential property market.
A Stats NZ report released on Thursday, May 2 said that house sales to overseas buyers dropped by 81 per cent in the March quarter compared to the same time last year.
“Overseas people acquired just 0.6 per cent of homes transferred in the first quarter of 2019, reflecting law changes in late 2018 that introduced restrictions for overseas buyers,” property statistics manager Melissa McKenzie said.
Home transfers to people who didn’t hold New Zealand citizenship or a resident visa fell over 80 per cent in the March 2019 quarter compared with the same quarter a year ago, Stats NZ said today.
There were 204 home transfers to people who didn’t hold NZ citizenship or a resident visa in the March 2019 quarter, down 81 per cent from 1,083 in the March 2018 quarter.
Total home transfers fell 3.5 per cent over the same period.
Softening Auckland residential property market
CoreLogic Senior Research Analyst, Kelvin Davidson said, “It’s clear from today’s Statistics NZ figures that October’s Foreign Buyer Ban has cut into property demand from this source, and is likely to have contributed to the softening in values in areas such as Auckland and Queenstown.”
“Clearly, last October’s Foreign Buyer Ban has now taken full effect and there have been some pretty dramatic shifts in areas such as Central Auckland and Queenstown,” Mr Davidson said.
In Auckland, on a monthly basis, the share of homes transferred to no NZ citizens or resident visa holders varied from a high of 7.8 per cent in March 2018, down to 1.1 per cent in March 2019. On a quarterly basis, the number of homes transferred to that group went from 678 in the March 2018 quarter to 111 in the March 2019 quarter.
Earlier, a media report appearing in Radio NZ said that an Average Auckland house price has dropped by $100,000 over three years.
However, that does not automatically means that prospective first home buyers can easily get into the property market as other factors such as low affordability and tighter credit availability continue to play a significant role.
Nevertheless, Auckland property market continues to be a buyers’ market where indeed buyers and more specifically first home buyers are in a better position to shop around for a better deal than what they could have got with the same level of finances about three years ago.
"Listings are as high as they've ever been for the last 10 years in Auckland so you've got plenty of choices and it's definitely a buyer's market you can shop around and to some extend upgrade your location so I'd say it's definitely a buyer's market," Mr Davidson said.
Not all first home buyers are in a rush
However, not all first home buyers are in a rush to make a move and rather prefer to wait and see if they can expect more softening of the market once the impact of foreign property ban starts coming into play.
Mukesh Chand and Nandini - a prospective first home buyer couple - who have been in the market since last three months told the Indian Weekender, “We are targeting Takanini area in South Auckland and considering a few options.
“However, we believe there is merit in waiting for some more time and see if we could be luckier and get what we want in the money that we can afford."
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