NZ First's Winston Peters has hinted changes to the current foreign buyers ban will be confirmed later down the line, and it's got experts speculating.
The changes could see foreign buyers allowed to purchase high-value homes over a certain value.
Sotheby's International Wellington Region Managing Director Glen Jones joined the Afternoons team to explain why the current ban is no longer fit for purpose - and why changes need to be made.
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Speaker 1 (00:09):
You're listening to a podcast from News Talk zed B.
Follow this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
So we are talking about the conversations around the Foreign
Buyers band. Consultation is underway within New Zealand first and
the coalition government the other parties for any changes, and
they are expecting to announce those changes later this week.
Joining us now is Glenn Jones, Managing director of Southerby's
International in Wellington. Glenn, very good afternoons.
Speaker 3 (00:36):
You good afternoon, Matt Tyler.
Speaker 4 (00:38):
What are the current rules about foreign buyers in New Zealand?
Speaker 5 (00:42):
Glenn, Well, effectively there's a blanket ban. So even if
we're trying to track significant global investment at the moment
with what they call the Golden Visa and that sort
of investment of between five and and ten million dollars
over sort of a period of three to five years,
even when those people invest those sums in this country,
(01:04):
they're still unable to buy a residential house here.
Speaker 4 (01:08):
A right, And what are the thresholds being considered.
Speaker 5 (01:12):
Well, there's been discussions around sort of I think two
million was what National Compact campaigned on. I think there's
been murmurs from New Zealand. First it'd be five million plus.
Speaker 3 (01:22):
But those sort of.
Speaker 5 (01:23):
Barriers or lines in the sand, that's sort of nonsensical.
You know, at the moment the world is vying for
the world's best talent in the world and significant investment,
you know, since since COVID, GFC and lots of global
crisis since you know, there's competition galore to get the
best people into this country. But our barrier to entry is, hey, look,
(01:44):
we want your money, but you can't buy a house
here now, even if you put in a say a
five million dollar blanket ban across the country for example, Hey,
you know, super uber wealthy people can come here for
five million plus. You know, if you look in Wellington
region at the moment, there's only two five million dollar
homes available on the market. So that are in ones
of why wrap and ones in company. So are we
(02:06):
then saying to somebody, hey, look, if you want to
build a business here in Wellington, for example, you'd have
to commute from Auckland or Queenstown. I mean, just that's
non sensical. And then that impacts of regions at what
level are the regions going to get hit by that?
Because if somebody wants to start a business in Palmerston
North or Timaru. It's going to push them to the
(02:27):
big cities, to the urban cities.
Speaker 4 (02:30):
What are the ramifications because this is of course the
argument for housing affordability for New Zealand is on a
say two million dollar threshold.
Speaker 5 (02:38):
Look, I mean, I think the wholesale ban frankly was
non sensical. But even if you could argue at the
time it was fit for purpose, it certainly isn't now.
I mean pre twenty eighteen market, when the band came
into force, only two point seven percent of our homes
were being acquired by foreigners. Now that was in a
year I think was about about a one hundred thousand sales.
(03:01):
We're in a population five million, we have two million
and fifty thousand households and two thousand and six hundred
are there thereabouts in one year went foreigners and that
catapulted this ban in place. Now, I can think of
some other drivers that were far more significant to inflating
our house price at the time, and foreign buyers coming
(03:21):
in here, you know we're not one of them. Now,
I mean, you can adopt a balanced approach here. I
don't think it needs to be binary. You know, foreigners
can buy here or they can't buy here. There's something
in the middle where everyone wins. You know, you put
you put a stamp duty on acquisitions at fifteen percent
for example, and to discourage speculation. If they buy a
(03:44):
second house or third house, that goes to thirty and
sixty percent respectively. You know that that stuff can go
straight back into social housing, healthcare, infrastructure, et cetera. And
how about for capital gains tax, you know, just put
a blanket flat forty percent attacks on the uplift of
when they sell. So they bought for one million you
know today and sold you know five years hence at
(04:05):
one point four million. You know, that's one hundred and
sixty thousand back into the government. Coffers and I also
understand some politicians have been arguing that we'll hold on.
You know, the big bad foreigners are going to come
over here, they go buy up New Zealand and then disappear,
and we're going to have ghost towns or ghost villages. Look,
there's solutions to every problem. You know, you can put
a vacancy tax on. Indeed, in Victoria and Australia they
(04:25):
have something similar called the absent tee owner surcharge which
deters ghost towns and generates local funding. Here, you could
say to local councils of homes that are owned by
foreigners a vacant for more than six months a year,
you know, charge the commercial council tax rates. You know
that's two point five times high in Auckland and three
(04:47):
point seven times high in Wellington. That then puts the
onus on local councils to ensure Yeah.
Speaker 2 (04:54):
Yeah, but doesn't it cap make sense though, Glenn that
I hear what you're saying that it made no sense
to you when it was implemented in the first place,
and arguably a lot of that was a political move
that it was popular at the time. But is there
not still the argument at the first first home buyer
market that when people young New Zealanders are trying to
get into the home and they're getting help from mum
and dad, and there is always that argument that you
(05:16):
create more competition by allowing people who do not live
in this country to purchase those homes as well. I mean,
on an optic side of things, you can see why
it was so popular at the time.
Speaker 5 (05:28):
Now no hundred percent. Look, I think there should be conditions.
I don't think any Joe blogs from across the world
you could just come here buy a house here.
Speaker 3 (05:35):
You know, they'll have to have relative visas.
Speaker 5 (05:37):
You know.
Speaker 3 (05:37):
I think if you came in on a student.
Speaker 5 (05:38):
Visa or any form of work visa, I think you
should ladder buy here. I mean, for example, we had
a couple from the US walk through a house of
about one point two million about five six weeks ago.
They were here on a six month fixed term visa
with the option of renewing.
Speaker 3 (05:54):
That.
Speaker 5 (05:54):
You know, they were unable to buy that. You know,
it's nonsensical that they that they couldn't. And the other
thing is, I think, you know that the Golden Visa,
I think that's great. You know, five to ten million
over three to five years. I think straight away they
should be allowed to at any price points. But I
think more than that, I'd bring that investment criteria down
(06:15):
to one or two million. But back to sort of
the skilled workers. You know, we've got a whole at
the moment, haven't we. We've got a very sizable skills shortagement.
We need healthcare, social services, I education, teaching for example.
We want these to attract these people. But we're saying, hey,
what you get here, you can't buy a house. I
mean again, it seems sort of counter intuitive. I think
(06:37):
last year we had a net loss of thirty thousand
people to Australia. On one hand, we don't want them
to leave. On the other, our doors are all but
close to the very people who we need to help
grow our country. And look, let's be honest, our economy
is on its knees. You know, any little any little
bit of relief at the moment would be beneficial to
all of us and have a sort of a domino
(06:58):
effective apostle outcomes across the country.
Speaker 4 (07:01):
Could you see the advantage of a cap. But you
have the Overseas Investment Act being strategic, So you know,
if you've got some if we've got some people that
we really need and there's a really good cause for it,
it'll mean that that that a head office will move
to New Zealand and they've got a bunch of people
that need to bring in. Then we strategically go, well,
(07:22):
we'll sell to these people at any price because it's
great for the for the country. Do you think that
you could see a situation where the Overseas Investment and
it could be that dynamic.
Speaker 3 (07:32):
Look again, it comes about how agile were we are.
Speaker 5 (07:35):
You know, if we can make quick decisions quick then
look but by all means, but if but if I
mean historically the iiO process, Well, historically I think that
I approached when it first came in about five six
years ago. You know, some of these visas were taking
between sort of nine and years and months to process.
You know, we're in competition the world over. You know,
(07:57):
somebody's going to bite off their arm, you know. I
think it's well publicized that, you know, and various things
went on on the USA last year that that that
a significant quantity of people were We're googling how do
I move to X country? Now, if they have to
sit in line and wait six to twelve eighten months
to get to our country, they're going to go somewhere
else here. So there's a plethora of people highly skilled.
(08:20):
You went to United Kingdom, went to Spain, went to
canadatl and we would have lost out. Yeah, it just
seems a little bit Yeah, caun't intuitive.
Speaker 3 (08:29):
Glenn.
Speaker 2 (08:30):
Really great to get your expertise on this. Thanks very
much for joining us, Brilli, Thanks for your time. That
is Glenn Jones, Managing director of Southeby's International in Wellington.
Speaker 1 (08:39):
For more from News Talks at b listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
You're listening to a podcast from News Talk zed B.
Follow this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
So we are talking about the conversations around the Foreign
Buyers band. Consultation is underway within New Zealand first and
the coalition government the other parties for any changes, and
they are expecting to announce those changes later this week.
Joining us now is Glenn Jones, Managing director of Southerby's
International in Wellington. Glenn, very good afternoons.
Speaker 3 (00:36):
You good afternoon, Matt Tyler.
Speaker 4 (00:38):
What are the current rules about foreign buyers in New Zealand?
Speaker 5 (00:42):
Glenn, Well, effectively there's a blanket ban. So even if
we're trying to track significant global investment at the moment
with what they call the Golden Visa and that sort
of investment of between five and and ten million dollars
over sort of a period of three to five years,
even when those people invest those sums in this country,
(01:04):
they're still unable to buy a residential house here.
Speaker 4 (01:08):
A right, And what are the thresholds being considered.
Speaker 5 (01:12):
Well, there's been discussions around sort of I think two
million was what National Compact campaigned on. I think there's
been murmurs from New Zealand. First it'd be five million plus.
Speaker 3 (01:22):
But those sort of.
Speaker 5 (01:23):
Barriers or lines in the sand, that's sort of nonsensical.
You know, at the moment the world is vying for
the world's best talent in the world and significant investment,
you know, since since COVID, GFC and lots of global
crisis since you know, there's competition galore to get the
best people into this country. But our barrier to entry is, hey, look,
(01:44):
we want your money, but you can't buy a house
here now, even if you put in a say a
five million dollar blanket ban across the country for example, Hey,
you know, super uber wealthy people can come here for
five million plus. You know, if you look in Wellington
region at the moment, there's only two five million dollar
homes available on the market. So that are in ones
of why wrap and ones in company. So are we
(02:06):
then saying to somebody, hey, look, if you want to
build a business here in Wellington, for example, you'd have
to commute from Auckland or Queenstown. I mean, just that's
non sensical. And then that impacts of regions at what
level are the regions going to get hit by that?
Because if somebody wants to start a business in Palmerston
North or Timaru. It's going to push them to the
(02:27):
big cities, to the urban cities.
Speaker 4 (02:30):
What are the ramifications because this is of course the
argument for housing affordability for New Zealand is on a
say two million dollar threshold.
Speaker 5 (02:38):
Look, I mean, I think the wholesale ban frankly was
non sensical. But even if you could argue at the
time it was fit for purpose, it certainly isn't now.
I mean pre twenty eighteen market, when the band came
into force, only two point seven percent of our homes
were being acquired by foreigners. Now that was in a
year I think was about about a one hundred thousand sales.
(03:01):
We're in a population five million, we have two million
and fifty thousand households and two thousand and six hundred
are there thereabouts in one year went foreigners and that
catapulted this ban in place. Now, I can think of
some other drivers that were far more significant to inflating
our house price at the time, and foreign buyers coming
(03:21):
in here, you know we're not one of them. Now,
I mean, you can adopt a balanced approach here. I
don't think it needs to be binary. You know, foreigners
can buy here or they can't buy here. There's something
in the middle where everyone wins. You know, you put
you put a stamp duty on acquisitions at fifteen percent
for example, and to discourage speculation. If they buy a
(03:44):
second house or third house, that goes to thirty and
sixty percent respectively. You know that that stuff can go
straight back into social housing, healthcare, infrastructure, et cetera. And
how about for capital gains tax, you know, just put
a blanket flat forty percent attacks on the uplift of
when they sell. So they bought for one million you
know today and sold you know five years hence at
(04:05):
one point four million. You know, that's one hundred and
sixty thousand back into the government. Coffers and I also
understand some politicians have been arguing that we'll hold on.
You know, the big bad foreigners are going to come
over here, they go buy up New Zealand and then disappear,
and we're going to have ghost towns or ghost villages. Look,
there's solutions to every problem. You know, you can put
a vacancy tax on. Indeed, in Victoria and Australia they
(04:25):
have something similar called the absent tee owner surcharge which
deters ghost towns and generates local funding. Here, you could
say to local councils of homes that are owned by
foreigners a vacant for more than six months a year,
you know, charge the commercial council tax rates. You know
that's two point five times high in Auckland and three
(04:47):
point seven times high in Wellington. That then puts the
onus on local councils to ensure Yeah.
Speaker 2 (04:54):
Yeah, but doesn't it cap make sense though, Glenn that
I hear what you're saying that it made no sense
to you when it was implemented in the first place,
and arguably a lot of that was a political move
that it was popular at the time. But is there
not still the argument at the first first home buyer
market that when people young New Zealanders are trying to
get into the home and they're getting help from mum
and dad, and there is always that argument that you
(05:16):
create more competition by allowing people who do not live
in this country to purchase those homes as well. I mean,
on an optic side of things, you can see why
it was so popular at the time.
Speaker 5 (05:28):
Now no hundred percent. Look, I think there should be conditions.
I don't think any Joe blogs from across the world
you could just come here buy a house here.
Speaker 3 (05:35):
You know, they'll have to have relative visas.
Speaker 5 (05:37):
You know.
Speaker 3 (05:37):
I think if you came in on a student.
Speaker 5 (05:38):
Visa or any form of work visa, I think you
should ladder buy here. I mean, for example, we had
a couple from the US walk through a house of
about one point two million about five six weeks ago.
They were here on a six month fixed term visa
with the option of renewing.
Speaker 3 (05:54):
That.
Speaker 5 (05:54):
You know, they were unable to buy that. You know,
it's nonsensical that they that they couldn't. And the other
thing is, I think, you know that the Golden Visa,
I think that's great. You know, five to ten million
over three to five years. I think straight away they
should be allowed to at any price points. But I
think more than that, I'd bring that investment criteria down
(06:15):
to one or two million. But back to sort of
the skilled workers. You know, we've got a whole at
the moment, haven't we. We've got a very sizable skills shortagement.
We need healthcare, social services, I education, teaching for example.
We want these to attract these people. But we're saying, hey,
what you get here, you can't buy a house. I
mean again, it seems sort of counter intuitive. I think
(06:37):
last year we had a net loss of thirty thousand
people to Australia. On one hand, we don't want them
to leave. On the other, our doors are all but
close to the very people who we need to help
grow our country. And look, let's be honest, our economy
is on its knees. You know, any little any little
bit of relief at the moment would be beneficial to
all of us and have a sort of a domino
(06:58):
effective apostle outcomes across the country.
Speaker 4 (07:01):
Could you see the advantage of a cap. But you
have the Overseas Investment Act being strategic, So you know,
if you've got some if we've got some people that
we really need and there's a really good cause for it,
it'll mean that that that a head office will move
to New Zealand and they've got a bunch of people
that need to bring in. Then we strategically go, well,
(07:22):
we'll sell to these people at any price because it's
great for the for the country. Do you think that
you could see a situation where the Overseas Investment and
it could be that dynamic.
Speaker 3 (07:32):
Look again, it comes about how agile were we are.
Speaker 5 (07:35):
You know, if we can make quick decisions quick then
look but by all means, but if but if I
mean historically the iiO process, Well, historically I think that
I approached when it first came in about five six
years ago. You know, some of these visas were taking
between sort of nine and years and months to process.
You know, we're in competition the world over. You know,
(07:57):
somebody's going to bite off their arm, you know. I
think it's well publicized that, you know, and various things
went on on the USA last year that that that
a significant quantity of people were We're googling how do
I move to X country? Now, if they have to
sit in line and wait six to twelve eighten months
to get to our country, they're going to go somewhere
else here. So there's a plethora of people highly skilled.
(08:20):
You went to United Kingdom, went to Spain, went to
canadatl and we would have lost out. Yeah, it just
seems a little bit Yeah, caun't intuitive.
Speaker 3 (08:29):
Glenn.
Speaker 2 (08:30):
Really great to get your expertise on this. Thanks very
much for joining us, Brilli, Thanks for your time. That
is Glenn Jones, Managing director of Southeby's International in Wellington.
Speaker 1 (08:39):
For more from News Talks at b listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
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