The Labour government minister responsible for policy settings around foreign buyers argues National’s election policy allowing overseas people to buy $2million-plus residential properties — which they’d be taxed 15% on — will only fuel further price growth.
Associate Minister of Finance David Parker — a former local MP — promoted legislation banning foreigner property buyers, apart from Australians and Singaporeans, that came into effect in 2018.
He notes at the time 10% of all homes in Queenstown-Lakes were being snapped up by foreigners, ‘‘and there’s no doubt that was having an effect on the market in an area that struggles to house its people .. and it [flowed] through to the infrastructure cost’’.
Recapping his comments at the time, he says ‘‘I think land markets should be run for the benefit of New Zealanders, and you shouldn’t distort the NZ market to serve the interests of overseas people’’.
At the time, prominent local investor and philanthropist, the late Sir Eion Edgar, argued the government should ‘‘just put a cap that an overseas party can’t buy a house under $2m or $3m — first-home buyers aren’t going to be buying houses for $2m or $3m’’.
Parker says he had great respect for Edgar and knew him for decades, ‘‘but I disagreed with him on this issue’’.
He believes the National Party’s proposed cap is ‘‘wrong in principle’’.
‘‘I don’t think [in] any section of the market, whether it’s above $2m, or any other range, you should have foreigners outbidding NZers for what is ours.
‘‘I know most NZers think it’s wrong they are outbid.
‘‘Whether it’s the most successful NZer outbid for the most beautiful section in Queenstown, or it’s the most modest house in a modest suburb, the same principle applies — NZers should not be tenants in their own country.’’
National’s $2m cap, Parker believes, will have an effect not just on high-end properties but on the whole of the property market — ‘‘it will drag every thing up’’.
He notes Queenstown’s average house price isn’t too short of $2m, anyway — according to interest.co.nz, the median house price in Queenstown-Lakes in July was $1.4m.
‘‘I’m not surprised some of the top-end real estate agents want it ’cos it’s in their economic interest, but that doesn’t mean it’s in the
economic interests of the population of Queenstown.’’
Told local high-end builder Wayne Foley claims the foreign buyer ban’s been ‘‘a total failure in controlling property prices for families and those entering the market’’, Parker says he’s wrong.
A combination of the ban and tax system changes meant a greater percentage of people are buying houses to live in, than when Labour took power in 2017 — ‘‘and that’s a fantastic thing’’.
Parker dismisses critics opposing the buyer ban on the grounds foreign buyers disproportionately support good causes.
‘‘I don’t want to minimise [their] contribution, but that’s not how you run a country — you shouldn’t run a country ever more reliant on the generosity of a small number of people who are super-wealthy …
‘‘It feels to me almost feudal.’’
Parker adds there’s always been an exception for foreign investors ‘‘who want to build housing to rent out’’.
Luxon: ‘$2m-plus floor will attract overseas talent’
While the Labour government’s David Parker was in Queenstown attacking National’s foreign buyer ban exemption for $2m-plus properties, its leader Christopher Luxon was defending the policy during a press conference in the resort.
‘‘We want to say to wealthy people overseas who want to invest in New Zealand that you should be able to buy a house, actually partner with a NZ company, bring talent, bring capital to the place.
‘‘[I] heard a lot of commentary in this region about people wanting to buy $10m-plus homes.
‘‘I want to have a tech entrepreneur that lives six months in San Francisco and six months in Queenstown to actually buy a house here, because that means they can actually make an in vestment, partner with a local firm, build their knowledge, pass on their talent.’’