Foreign ownership of real estate is a growing concern in New Zealand, Australia, and Canada, mainly because it’s widely believed that foreign acquisitions drive up house prices and reduce the stock that locals can acquire.
In terms of affordability, New Zealand virtually mirrors developments in Australia, with residential property inflation reaching 10.46% in the former in 2016. Additionally, prices in NZ have risen by 34% over the past three years.
When it comes to affordability issues, New Zealand is seen as being ahead of Australia in fixing some aspects and behind in others. Jacinda Ardern, who became New Zealand’s prime minister last month, wants to completely ban foreigners from owning residential property.
Australia’s Foreign Investment Review Board (FIRB) already applies a ban on foreign ownership of existing housing (though foreigners can still buy new housing). Both countries still allow permanent residents to buy existing homes.
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