The Government has has used the launch of a new build-to-rent facility in Auckland to announce new rules for the Overseas Investment Act.
More money will be directed towards build-to-rent developments - and foreign investors will have a streamlined pathway to acquire land for said developments.
Infometrics principal economist Brad Olsen says this move will likely add to the nation's housing supply over time.
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Speaker 1 (00:00):
Now the government is set to change the Overseas Investment
Act to get more foreign investors to build housing here.
It's aimed to unlock money going in to build to
rent developments. It's not going to change bands on foreign
and as buying existing residential property. All Land Brad Olson
is Infametric's principal economist. Hey Brad Good evening, how's this
going to work?
Speaker 2 (00:18):
Well, I think they're trying to make it so there's
a streamlined pathway for this investment having instead of having
to go through the normal hoops, if you will, of
overseas investment, which does seem to take quite a while.
It seems to be complex and costly, you know, and
it's the same for if you're doing a build to
rent scheme or if you're trying to purchase part of
another foreign company. The government said they want to provide
(00:40):
that sort of more streamlined option, so there's a specific
sort of ability to go through so you can get
your application in for build to rent and that'll be
a bit, hopefully a bit quicker enabled. I mean it
seems to be an area where we need more housing.
We'll take all the help we can get. And if
investors are saying as they often do, that there is,
you know, that much point of having to go through
(01:01):
all the paperwork and similar this seems to be a
fast and efficient method to try and get some of
those investors back into the country a bit quicker.
Speaker 1 (01:08):
Are they interested in coming here to these investors?
Speaker 2 (01:10):
Well, it seems like, I mean this announcement was made
as the Prime Minister and the Housing Minister we're opening
a new bill to rent development in Mount Wellington from
an overseas provider, and I think as well, the difference here,
right is that they're not looking to just have people
to come into New Zealand and sort of buy one
existing property and rented out like a mum and dad investor.
(01:31):
The idea here is to sort of have slightly larger,
sort of medium scale operations and also importantly that they'll
often be sort of longer lasting, so that gives a
bit more security for the landlord for the operator that
they've got sort of a longer term and sort of
more consistent return. Also probably good for the renter who
doesn't have to worry as much or won't have as
much worry about getting turfed out. I mean, look, Heather
(01:53):
as a renter that's always something I worry about at
the moment. So this seems like a good middle ground
and a good plan to try and add a bit
into the housings to fly over time.
Speaker 1 (02:02):
Yeah, totally. Now, Chris Bishop talked about the need to
lower construction costs. That's easier said than Don Woods's plan.
Speaker 2 (02:09):
Well, I think you've heard from both him and also
the building construction Minister pink over some of these areas
where they want to bring in the ability to have
basically a wider variety of products, so that that's one
of the things that competition will overtime lower building costs.
But at the same time, you don't want to go
into a position where you let anyone use anything. You
(02:30):
get lower quality products and it sort of screws it
up and we have another leaky home. So I think
what they're looking at at the moment is trying to
lower that barrier by seeing if there are other comparable
jurisdictions in the world. If they allow a particular building
product will be able to use it as well. In
New Zealand, you saw during the likes of the pandemic
when supply chains were a bit broken, and you know,
(02:50):
there was a not as much ability to produce some
of the fiber board, and that for houses overseas, we
were bringing in elephant board and stuff that came through.
That's I think an enduring opportunity because every building you
speak to sort of talks about two things. One the
materials cost a lot, and two the consens cost a
lot and take a long time. So if they can
(03:11):
try and fix all parts of that, you don't need
to completely fix them overnight. Just a bit of improvement
in all of them I think would go a long
way to enhancing how quickly we can get stuff built
and hopefully at not the same insane costs that we
sometimes have.
Speaker 1 (03:24):
Yeah too right, well said hey, Brad, thank you very much,
look after yourself. Brad Olson in for Metrics Principle Economists.
For more from Heather Duplessy Allen Drive, listen live to
news talks the'd be from four pm weekdays, or follow
the podcast on iHeartRadio.
Now the government is set to change the Overseas Investment
Act to get more foreign investors to build housing here.
It's aimed to unlock money going in to build to
rent developments. It's not going to change bands on foreign
and as buying existing residential property. All Land Brad Olson
is Infametric's principal economist. Hey Brad Good evening, how's this
going to work?
Speaker 2 (00:18):
Well, I think they're trying to make it so there's
a streamlined pathway for this investment having instead of having
to go through the normal hoops, if you will, of
overseas investment, which does seem to take quite a while.
It seems to be complex and costly, you know, and
it's the same for if you're doing a build to
rent scheme or if you're trying to purchase part of
another foreign company. The government said they want to provide
(00:40):
that sort of more streamlined option, so there's a specific
sort of ability to go through so you can get
your application in for build to rent and that'll be
a bit, hopefully a bit quicker enabled. I mean it
seems to be an area where we need more housing.
We'll take all the help we can get. And if
investors are saying as they often do, that there is,
you know, that much point of having to go through
(01:01):
all the paperwork and similar this seems to be a
fast and efficient method to try and get some of
those investors back into the country a bit quicker.
Speaker 1 (01:08):
Are they interested in coming here to these investors?
Speaker 2 (01:10):
Well, it seems like, I mean this announcement was made
as the Prime Minister and the Housing Minister we're opening
a new bill to rent development in Mount Wellington from
an overseas provider, and I think as well, the difference here,
right is that they're not looking to just have people
to come into New Zealand and sort of buy one
existing property and rented out like a mum and dad investor.
(01:31):
The idea here is to sort of have slightly larger,
sort of medium scale operations and also importantly that they'll
often be sort of longer lasting, so that gives a
bit more security for the landlord for the operator that
they've got sort of a longer term and sort of
more consistent return. Also probably good for the renter who
doesn't have to worry as much or won't have as
much worry about getting turfed out. I mean, look, Heather
(01:53):
as a renter that's always something I worry about at
the moment. So this seems like a good middle ground
and a good plan to try and add a bit
into the housings to fly over time.
Speaker 1 (02:02):
Yeah, totally. Now, Chris Bishop talked about the need to
lower construction costs. That's easier said than Don Woods's plan.
Speaker 2 (02:09):
Well, I think you've heard from both him and also
the building construction Minister pink over some of these areas
where they want to bring in the ability to have
basically a wider variety of products, so that that's one
of the things that competition will overtime lower building costs.
But at the same time, you don't want to go
into a position where you let anyone use anything. You
(02:30):
get lower quality products and it sort of screws it
up and we have another leaky home. So I think
what they're looking at at the moment is trying to
lower that barrier by seeing if there are other comparable
jurisdictions in the world. If they allow a particular building
product will be able to use it as well. In
New Zealand, you saw during the likes of the pandemic
when supply chains were a bit broken, and you know,
(02:50):
there was a not as much ability to produce some
of the fiber board, and that for houses overseas, we
were bringing in elephant board and stuff that came through.
That's I think an enduring opportunity because every building you
speak to sort of talks about two things. One the
materials cost a lot, and two the consens cost a
lot and take a long time. So if they can
(03:11):
try and fix all parts of that, you don't need
to completely fix them overnight. Just a bit of improvement
in all of them I think would go a long
way to enhancing how quickly we can get stuff built
and hopefully at not the same insane costs that we
sometimes have.
Speaker 1 (03:24):
Yeah too right, well said hey, Brad, thank you very much,
look after yourself. Brad Olson in for Metrics Principle Economists.
For more from Heather Duplessy Allen Drive, listen live to
news talks the'd be from four pm weekdays, or follow
the podcast on iHeartRadio.
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