A ban on foreigners buying residential property would damage Queenstown’s economy and reputation, local experts say.
The new Labour-led government’s Overseas Investment Amendment Bill aims to improve housing affordability for Kiwis by stamping out foreign speculators.
business heavyweights and the local council are concerned it will shut the gate on non-resident foreigners buying and building homes, affecting not only the construction industry but the whole community.
The Bill’s still in draft form – submissions have been extended till February 16 – but some local real estate transactions, building contracts and developments have already fallen over.
Mayor Jim Boult and council boss Mike Theelen, in their submission, say “measures to improve affordability should not be undertaken at the expense of the significant economic and social value provided by overseas home buyers”.
“Should this Bill progress in its current form, it would be to the detriment of our district, the nation and our reputation globally.”
Boult last month said the district’s fast-growing economy relies heavily on overseas professionals.
If they can’t buy a home here, the district would lose their desperately-needed skills, Boult adds.
Local investor and philanthropist Sir Eion Edgar says to address concern about foreigners squeezing out Kiwi first-home buyers, “just put a cap that an overseas party can’t buy a house under $2 million or $3m – first-home buyers aren’t going to be buying houses for $2m or $3m”.
His biggest concern is the Bill frightening off foreigners who’ve made huge contributions to the area.
He cites four examples in his submission:
1. Swiss-based South African music producer Mutt Lange buying four stations between Queenstown and Wanaka for about $60m, restoring them for $50m, maintaining them at a cost of $3m to $5m a year and gifting 90 per of the land to NZ.
2. Japanese Eiichi Ishii and his family spending several hundred million dollars developing Arrowtown’s Millbrook Resort.
3. Americans Debbi and Paul Brainerd spending about $40m replacing the run-down Glenorchy campground with an eco-friendly facility, with profits going to the local community.
4. Edgar says money for community projects like Winter Games NZ, Queenstown Trails Trust and Wakatipu Wilding Conifer Control group, “the most generous supporters are overseas people who have a residence in the area”.
Local lawyer Elliot Goldman says: “Even if you’re trying to get on the housing ladder, you can’t think this Bill is a good thing because all it’s going to do is limit the influx of capital that gives people livelihoods – particularly in the construction industry.”
Peter Campbell, whose Triple Star Management builds about four luxury homes a year, mainly for foreigners, tells Parliament his firm is a significant contributor to the economy, employing 60 staff.
“The majority … are in the middle-income range and face the issues around affordability that this Bill seeks to address.”
However the Bill, he alleges, would immediately curtail construction of these homes.
Already, as a result of the proposed legislation, a number of overseas clients have cancelled construction projects, and one has put a planned Glenorchy subdivision – “planned to be priced at the low to middle end of the market” – on hold.
Meanwhile, children’s author Craig Smith, whose mum had Queenstown’s first state house, supports the Bill as “one tiny piece” in a raft of measures to improve housing affordability.
“I do support it – if you went to China or Vietnam, you couldn’t buy a property.”