NZ passes ban on foreign homebuyers into law

WELLINGTON: New Zealand’s parliament passed a law on Wednesday to ban many non-resident foreigners from buying existing homes, completing the Labour-led government’s election campaign pledge.

Jacinda Ardern, New Zealand’s popular 38-year-old prime minister, campaigned before September’s election on a promise to clamp down on house price growth and reduce high rates of homelessness, in part by banning foreign buyers.

"This is a significant milestone and demonstrates this government’s commitment to making the dream of home ownership a reality for more New Zealanders," Associate Finance Minister David Parker said.

Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, almost double in the past decade and rise more than 60 percent nationwide.

House price growth has tapered off in the past year in part due to restrictions imposed on lending by the central bank, which was becoming alarmed at the potential financial stability risk of an overheated market.

Figures released by the Real Estate Institute of New Zealand on Wednesday showed median house prices had slipped 1.8 percent to NZ$550,000 ($360,140) in July from the previous month, although they were still 6.2 percent higher than the same time the previous year..