Overseas buyer activity fell off a cliff in the first quarter of the year after restrictions to bar foreigners from snapping up existing homes took hold.
Home transfers to people who didn’t hold New Zealand citizenship or a resident visa fell more than 80 percent in the March 2019 quarter compared with the same period a year earlier, Stats NZ said.
“Overseas people acquired just 0.6 percent 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. In those cases, none of the buyers were NZ citizens or resident-visa holders although the data excludes cases where all the buyers were corporate entities.
There were 204 home transfers to people who didn’t hold NZ citizenship or a resident visa in the March 2019 quarter versus 1,083 in the March 2018 quarter. Total home transfers fell 3.5 percent over the same period.
The ban on foreign buyers took effect from Oct. 22 and prevents most people who don’t hold NZ citizenship or a resident visa from buying residential property in New Zealand.
Under the revamped act, there are exemptions for those who buy new apartments in certain developments, who add to New Zealand’s housing supply, and for Australian and Singaporean citizens.
“The share of home transfers to overseas people peaked at 3.3 percent in the March 2018 quarter when the law changes were being discussed,” said McKenzie.
Meanwhile, separate data showed planned building activity in March dipped slightly from a year earlier, but remained strong over the 12-month period.
Residential permits for all dwellings fell a seasonally adjusted 6.9 percent to 3,064 in March from the prior month, after increasing 1.7 percent in February and 13.4 percent in January, Stats NZ said. Consents for houses alone lifted a seasonally adjusted 0.8 percent to 1,898.
In actual terms, there were 3,180 residential permits granted in March, up 8.7 percent from a year earlier. Of those, there were 1,949 consents for houses, up 11.2 percent. Apartment consents numbered 455, down 7.5 percent while retirement village unit consents were 174, up 171.9 percent. Consents for townhouses, flats and units numbered 602, down 2.4 percent.
A total of 34,516 new dwellings were consented for New Zealand in the 12 months through March, up 10 percent on the prior year. Auckland continues to lead the drive to build more houses with the number of new homes consented in the year to March up 24 percent on the prior period.
“New homes consented in Auckland and New Zealand are at levels last seen in the mid-1970s, although the population has risen significantly over the same period,” McKenzie said.
In the year ended March 2019, non-residential building consents totalled $7.1 billion, up 7.6 percent from the March 2018 year.