It was no surprise that today’s figures for Q2 from Stats NZ showed continued low levels of activity in NZ’s residential property market from foreign buyers. Waitemata in Central Auckland remains a key area that’s been impacted, alongside Queenstown.
CoreLogic Senior Property Economist Kelvin Davidson comments:
In the three months to June, there were 183 property purchases by people without citizenship or a residency visa, 933 fewer (-84%) than the same quarter last year. This was 0.5% of all purchases, down from 0.6% in Q1 2019 and 2.8% a year ago. At the same time, people without citizenship/residency sold 327 properties in Q2 (0.9% of all sales), resulting in a net change in ownership of -144.
So the latest figures were a not-surprising continuation of what we saw in Q1; that the Foreign Buyer Ban has fulfilled its aim of reducing the role of non-citizens/residents in the NZ residential property market. This is one factor for the restrained growth in property values that we’re seeing nationally.
In terms of the local area-level figures, however, they’ve become harder to get clear messages from. This is because as the number of foreign-related deals falls, confidentiality issues mean that more of the figures are withheld. Even so, the data still shows that Waitemata in Central Auckland has taken the lion’s share of the drop in foreign buying (down by 246 from a year ago), while Christchurch, Howick (Auckland), and Hamilton have also seen large percentage falls.
Queenstown-Lakes is another area that stands out for a significant drop in foreign buying, just at a time when construction also remains high (see our recent commentary on this here). In turn, these factors will have contributed to the fall in average property values that we’ve seen there of 2.2% in the past three months.
Overall, given that Australians and Singaporeans are exempt from the ban (as well as other nationalities buying apartments in large-scale developments), there’ll always be some level of foreign buying in NZ. But recent quarters will have seen more openings in the market for non-foreign buyers than otherwise would have existed, and that will remain the case.