New Zealand Prime Minister Jacinda Ardern stressed that Australians will be the only foreign investors to retain their privileges in the New Zealand housing market.
“The effect of this [ban] will mean that non-residents or non-citizens cannot purchase existing residential dwelling in New Zealand, with the exception of Australian citizens, because New Zealand citizens hold the same right to purchase in Australia and it’s a right we will extend to them in New Zealand,” the Prime Minister said.
The ban has been proposed to make home ownership “more accessible” to New Zealanders, but this benefit could extend to Australians who share the same rights as their Kiwi neighbours.
“This presents and represents a simple clean solution to help us act in the best interest of home buyers in New Zealand,” Ms Ardern continued.
“That allows us to now focus on some of those additional sticking points.”
This change could indirectly serve the interests of Australian investors who may wish to opt into the New Zealand market and escape record-high property prices in the domestic market.
A gap may soon be opening in the Kiwi market, as the government aims to “send a clear signal” to foreign investors (excluding Australia).
“The reality is there’s going to be change and a clear signal sent internationally that New Zealand is no longer for sale in the way it has been,” Deputy Prime Minister Winston Peters said.
The New Zealand government is set to introduce an amendment to the Overseas Investment Act before Christmas, which could mean that the ban could be ratified early next year.
“We expect legislation to be in place and introduced before Christmas and to take effect once passed in early 2018,” Prime Minister Ardern added.
Ms Ardern is also confident that the change will not violate regional trade agreements.
“This solution does not breach our Korea FTA; it will not impact on TPP if passed on the timeline I have proposed, nor will it impact on the China FTA.”
The newly elected leader conceded that the change may “pose challenges” to their agreement with Singapore, but believes that there is “a way through” since the deal will soon be up for renegotiation.