Foreign buyer ban will have minimal impact on sales

11 December 2017
For immediate release

Foreign buyer ban will have minimal impact on residential sales says REINZ

The upcoming foreign buyer ban on purchasing existing properties is expected to have a minimal impact on residential sales according to new research from the Real Estate Institute of New Zealand (REINZ) – source of the most complete and accurate real estate data in New Zealand.

REINZ recently surveyed its residential agent members and found responses indicated that currently only a minority of buyers are from overseas (3.8%).
Bindi Norwell, Chief Executive, at REINZ says: “Ahead of the Government’s upcoming foreign buyer ban we were interested to understand exactly what percentage of residential sales were made to international buyers as there is minimal data available. So, who better to ask than those who deal with this day in and day out – our members.

“Our survey indicates that only a small number of sales are made to buyers from offshore – the clear majority of sales are made to locals (63.9%) and those from other towns or cities from within New Zealand (29.8%),” continues Norwell.

In order to gain a clear picture of the situation, the survey also sought to understand the make up of open home visitors. Again, the majority of open home visitors were local (64.1%), followed by 28% from out of town and only 4.5% from overseas – the remaining 3.4% were classed as ‘other’.

“Given international buyers are such a small part of the market we’re interested to understand what impact the Government believes the foreign buyer ban will actually have? We know when looking at Australia that a similar policy there has had little impact with Australia still remaining the third most unaffordable country in the world,” concludes Norwell.

The survey also sought to understand the make-up of buyers in the market. Currently most purchasers are owner occupiers (52.3%), followed by first time buyers (26.3%) and investors only made up 14.2% of buyers. The remaining 7.3% of buyers were classified as ‘other’.

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