The country’s parliament on Wednesday passed a law banning foreigners from buying into most parts of its residential property market as the government seeks to cool red-hot house prices.
The Overseas Investment Amendment Bill will prevent overseas investors from purchasing existing properties in New Zealand, but they will still be able to buy into new apartment complexes and certain other parts of the housing market.
New Zealand Prime Minister Jacinda Ardern campaigned on a promise to clamp down on foreign buyers, blaming them for soaring prices that have left many New Zealanders unable to enter the property market.
Most foreign buyers in New Zealand don’t state where they’re from, official data shows, but the majority of those who do are from China.
New Zealand has also proved to be a popular retreat for the rich and famous. Billionaire investor Peter Thiel and disgraced former NBC host Matt Lauer both own properties in the country.
The Chinese, in particular, are buying property all over the world – especially in America.
Thanks to their booming economy, there are a lot of Chinese people who have a lot of money. But they still live in a totalitarian regime where their assets can be seized or they can be cast out at any time. There is no real protection for private property in China. So what do you do if you are a wealthy Chinese businessman and you don’t want your assets to evaporate by the whim of a dictator? You buy property in other countries that protect private property. That way, if something happens in China, at least you still have a pot of gold buried somewhere for your family.