Sunday 28 July, 2013
 
Labour announces new policy to restrict foreign house buyers.
 
Labour leader David Shearer told TVNZ’s Q+A programme that under a Labour government they would, “clamp down on the foreign speculators that are coming into our housing market and helping to push the prices up.”
 
David Shearer says it would follow “very closely” the Australian model.
 
“Look, basically, we’re going to restrict almost totally foreign ownership to buy established houses that are here. It’s following on very much, very closely to the Australian example. They do have the same policy. They’ve had it in place for a long time. And we want to do is to make sure that first-home buyers are Kiwis and they have the best chance.”
 
Like the Australian example, David Shearer says they would allow foreigners to come in and build houses.
 
“Exactly, because that’s what we would allow as well, because that increases the housing stock, and that’s obviously good for us. Like it’s been shown to happen in Australia, it’ll mean that we have more houses in NZ.”
 
Shearer says ultimately we have a problem of supply and affordable housing being built.
 
“But it is part of the problem, and it’s time that we made sure that we got behind New Zealanders and first-home buyers to give them the best chance of being able to buy a house.  And if those people, those foreign speculators are coming in, let’s get on the side of New Zealanders rather than on the side of foreign speculators and shut them out.”
 
Shearer says as we have a reciprocal arrangement with Australia, Australians would be exempt.
 
“Well, it applies to every country in the world other than, as I say, Australia.  But when you actually look overseas, the UK has just introduced restrictions on house purchases in the UK. So has China, so has Singapore, so has Hong Kong. We are one of the few countries in the world. We’re the muggins that sort of says, ‘Come in here and speculate on our housing market.’ We want to do exactly what those other countries are doing and saying, ‘No, we want to put our restrictions in.’”
 
This follows Labour plans to build 10, 000 affordable homes every year for ten years and the introduction of a capital gains tax on investment property.

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Repeated Sunday evening at 11:30pm. Streamed live at www.tvnz.co.nz   
 
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Q+A
 
CORIN DANN INTERVIEWS DAVID SHEARER
 
 
SUSAN WOOD
Labour Leader David Shearer says he’s got the answer to housing. Corin spoke to him earlier and asked him for that solution.
 
DAVID SHEARER - Labour Party Leader
We have to do a number of different things. We can’t just do one. But the first thing is we have to increase housing supply. So we’ve already come out and said we will build 10,000 affordable homes every year for 10 years. We’ve got to stamp down on speculation. That means a capital gains tax on those people who are actually buying second, third, fourth houses, flicking them off and making a lot of money. And today what we’re saying is we’ve got to also clamp down on the foreign speculators that are coming into our housing market and helping to push the prices up.
 
CORIN DANN
                        Right. How are you going to do that?
 
DAVID            Look, basically, we’re going to restrict almost totally foreign ownership to buy established houses that are here. It’s following on very much, very closely to the Australian example. They do have the same policy. They’ve had it in place for a long time. And we want to do is to make sure that first-home buyers are Kiwis and they have the best chance.
 
CORIN            So, let’s be clear about this. If you are a non-resident of NZ, you will not be able to buy a residential house, if you like, in your average city in NZ. Is that what you’re saying?
 
DAVID            That’s exactly right. There’s a few minor exceptions, but that’s exactly right.
 
CORIN            What about- I mean, I know in Australia, they allow people to build houses, foreigners to come in and build houses. Is that an exemption you’re looking at as well?
 
DAVID            Exactly, because that’s what we would allow as well, because that increases the housing stock, and that’s obviously good for us. Like it’s been shown to happen in Australia, it’ll mean that we have more houses in NZ.
 
CORIN            Why do we need this? I mean, how much- I mean, Tony Alexander has been probably the one leading the charge on this. He says this isn’t a huge problem. I mean, about between 5 per cent and 10 per cent of the market is being driven by foreign buyers. It doesn’t sound like a huge problem, is it?
 
DAVID            It’s not the only problem we have. Ultimately, we have a problem of a lack of houses being built, affordable houses being built. But it is part of the problem, and it’s time that we made sure that we got behind New Zealanders and first-home buyers to give them the best chance of being able to buy a house.  And if those people, those foreign speculators are coming in, let’s get on the side of New Zealanders rather than on the side of foreign speculators and shut them out.
 
CORIN            What’s the goal here? What are you trying to do? Is it going to reduce prices in houses? Are you trying to make houses more affordable by just cutting out people from the market? Is it going to make houses more affordable?
 
DAVID            It basically decreases demand. So if you decrease demand by shutting out a group of people who otherwise want to be able to invest or speculate, in fact, on NZ houses, it means that by shutting those people out, demand goes down, and the prices will stay more stable as well, and that gives New Zealanders who are wanting to get into that market a much better opportunity.
 
CORIN            Does this apply to all foreigners? Is there any exemption? Because I know with Australia, yes, they’ve got a restrictions scheme there, but we can go a buy houses in their residential market.
 
DAVID            Exactly. And what we’re doing is exactly the same thing here with our policy. We’re exempting Australians for exactly as you say. We are able to buy houses in the Australian market. We should allow an Australian-
 
CORIN            But they’re a big chunk of those that are buying houses here.
 
DAVID            They are, but we have a reciprocal arrangement with Australia, and I do believe that by stopping Australians coming over here and buying our houses, we obviously risk the possibility they would shut us out as well. We’d have to look at that and see just exactly what happens, but I do believe that right now we need to make sure that we take care of that.
 
CORIN            Sure. You can see the danger here, because the next biggest group’s from the UK and then are Asian buyers, and people are going to say that you’re actually targeting Asian buyers here, that this has got xenophobic undertones to it.
 
DAVID            Well, it applies to every country in the world other than, as I say, Australia.  But when you actually look overseas, the UK has just introduced restrictions on house purchases in the UK. So has China, so has Singapore, so has Hong Kong. We are one of the few countries in the world. We’re the muggins that sort of says, ‘Come in here and speculate on our housing market.’ We want to do exactly what those other countries are doing and saying, ‘No, we want to put our restrictions in.’
 
CORIN            But there have been dozens of stories, and people anecdotally are worried - rightly or wrongly - about a lot of Asian interest in NZ’s housing stock. There are going to be people in Asia who say this is a mainstream NZ political party which is excluding us.
 
DAVID            And they’re doing exactly the same thing for us as well, so I think they should actually understand that all we’re doing is reciprocating. So, China, Singapore, Hong Kong have all introduced restrictions in their markets for me being able to go over, for example, and buy in their markets. We’re just doing exactly the same thing. And when I look overseas, and you look at some of the websites that I’ve been looking at recently, it’s in South Africa, for example, a website in South Africa, a NZ company advertising NZ homes here. One in Invercargill. ‘$170,000 home, four-bedroom home. Invest in NZ. Why? No capital gains tax, no stamp duty, no restrictions. Easy-peasy. Come over here and do it.’
 
CORIN            And we’re copying the Australian model, you say, but they have got a capital gains tax, they have got stamp duty, and they’ve got this restriction on foreign buyers, but they’ve still got housing affordability issues there, don’t they?
 
DAVID            They have, but what we can do here is at least be able to contain much of what the increases have been in particularly the Auckland market, but also in Christchurch. This just adds to the need to build more houses, and we have already come out with KiwiBuild to build 10,000 houses a year for the next 10 years, to put in a capital gains tax to hit those speculators that are making money out of house-price speculation, and this is a third tier of policy which will constrain the prices, reduce, take the heat out this market and give New Zealanders a fair go.
 
CORIN            Are we going to see plenty of detail on this? I mean, for example, what about farm sales? Do they get included? Apartments? I mean, there’s going to grey areas, aren’t there?
 
DAVID            Well, we’ve already come out with our policy on farm sales. We do not believe farms should be sold to foreigners unless there is a specified and observable benefit to NZ - new markets, new technologies, something of that order. Otherwise, unless you are a resident, you should not be able to buy farmland in NZ, and the same thing we are applying to residential houses. The point here is we want investment into NZ, but we want it to be the right investment that’ll really get in behind and create and grow NZ businesses, not speculate around our property market and shut Kiwis out of buying a house.
 
CORIN            Why do this now? There will be some people who say this is about David Shearer trying to seize back the agenda and brush aside questions about his leadership. Why do it now?
 
DAVID            Well, we’ve looked at it for quite a long time now. We’ve actually spoken about it a few weeks ago. There is a real momentum going in Auckland and elsewhere with house prices going up. 30 per cent increase over the last four years. We’ve got to do something about that, because I see so many young couples who say to me, ‘I’m 35, I’m 36, I’m 37. I’ve always been told that I would be able to afford to buy a house.’ It’s just getting beyond them, and I just feel for those people, and I believe that we have to get out with the policies that will give them a fair go.

ENDS

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