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Overseas home buyers’ share relatively unchanged in December

Press Release – Statistics New Zealand

n the December 2018 quarter, 2.3 percent of home transfers were to people who didnt hold NZ citizenship or a resident visa, Stats NZ said today.n the December 2018 quarter, 2.3 percent of home transfers were to people who didn’t hold NZ citizenship or a resident visa, Stats NZ said today.

This compares with 2.9 percent in the December 2017 quarter, and 2.0 percent in the September 2018 quarter.

“This quarter’s share of overseas home buyers is comparable to recent results, when transfers may have been influenced by discussions about Overseas Investment Act changes,” property statistics manager Melissa McKenzie said.

“The latest quarter’s results may not fully reflect the impact of law changes that took effect on 22 October 2018, as transfers aren’t counted in our statistics until the contract is completed, which could take a month or longer.

For example, where someone agreed to buy a new home off-the-plans before 22 October, the home transfer may only be counted months later when construction is complete.”

See table 1 of Property transfer statistics: December 2018 quarter (Excel) for numbers and percentages of home transfers by affiliation.

The Overseas Investment Amendment Act 2018 prevents most people who don’t hold NZ citizenship or a resident visa from buying residential property in New Zealand. There are exemptions for Australian and Singaporean citizens, for those that buy new apartments in large developments, and for those that add to New Zealand’s housing supply by building new homes.

Little change in annual figures

In the year ended December 2018, 2.6 percent of all home transfers across the country were to people who didn’t hold NZ citizenship or a resident visa, similar to the 2.4 percent in the previous year. Waitemata local board area (Auckland inner city) had the highest proportion of home transfers to people who didn’t hold NZ citizenship or a resident visa – 17 percent in the latest year, up from 10 percent in the year ended December 2017.

Frequently asked questions

How many ‘foreigners’ are buying New Zealand homes?

It depends how you define ‘foreigner’. In the December 2018 quarter, of all home transfers:
• 80 percent were to at least one NZ citizen
• 10 percent were to corporate entities only (which could have NZ or overseas owners)
• 8.0 percent were to at least one NZ-resident-visa holder (someone who can live and work in New Zealand for as long as they like)
• 2.3 percent were to no NZ citizens or resident visa holders.

When we talk about transfers to ‘overseas people’, we mean the 2.3 percent of transfers where none of the buyers were NZ citizens or resident-visa holders (excluding transfers where all the buyers were corporate entities). We focus on this measure because it aligns most closely with the definition of ‘overseas person’ in the Overseas Investment Act 2005.

What about the Overseas Investment Amendment Act 2018?

The new Act affects contracts signed from 22 October 2018 but may take some time to affect these statistics, as transfers are not counted until completed. The new Act prevents most people who don’t hold NZ citizenship or a resident visa from buying residential property in New Zealand. There are exemptions for Australian and Singaporean citizens, for those that buy new apartments in large developments, and for those that add to NZ’s housing supply by building new homes.

For further information see Overseas Investment Amendment Act 2018.

Why do you talk about ‘transfers’ not ‘sales’?

A transfer is not the same as a sale. Transfers often involve a sale, but there are many other possible reasons for a transfer (such as marriage settlements, boundary changes, trustee changes, and changes in the share of ownership).

Every sale is a transfer, but not every transfer is a sale. We refer to the parties involved as buyers and sellers for simplicity.

We know the number of transfers to overseas people because this information is collected on land transfer tax statements, which cover all types of transfer and not just sales.

How many of the corporate entities have ‘foreign’ owners?

Information on the ownership of corporate entities (by New Zealanders or overseas people) is not currently available, as it is not collected on land transfer tax statements.

How are trusts captured in these statistics?

We count a trust based on the visa or citizenship status of its trustees. If at least one trustee holds NZ citizenship, then the transfer is counted as a transfer to a NZ citizen.

Aren’t there lots of people missing from these numbers?

We have information about the visa status or citizenship of virtually all people who transfer property in New Zealand. The only uncertainty is around the ownership of corporate entities that transfer property.

In addition to statistics about the visa status or citizenship of people who transfer property, we also publish statistics about their tax residency. The tax residency statistics include a large category for parties that are exempt from stating their tax residency on a land transfer tax statement (eg because the transfer involves their main home). The visa and citizenship statistics are not affected by this exemption, because these people are still required to state their visa or citizenship status.

Tax residency is not the same as nationality. We advise focusing on the statistics about visa or citizenship status (also known as affiliation).

How much New Zealand property is owned by ‘foreigners’?

We do not currently have a register of property owned by overseas people. These property transfer statistics measure overseas involvement in property transfers in any given quarter, but not the total amount of property owned by overseas people.

What is the net change in ‘foreign’ ownership of New Zealand property?

We don’t produce a measure of the net change in property owned by overseas people.

If you subtract seller statistics from buyer statistics to calculate a net change in home ownership, it is important to note that:
• between the time of buying and selling a home, owners can move between affiliations (eg a work-visa holder could become a resident-visa holder or NZ citizen)
• some types of affiliations may sell many newly built homes (eg corporate entities).

Therefore, net changes for a given affiliation could be understated or overstated.

Can transfers of bare residential land be identified in these statistics?

No, we can’t currently identify bare residential land in these statistics, but it is included, along with homes, commercial, and other land, in total property transfers.

Video

See Property transfer statistics: December 2018 quarter video explaining property transfer statistics.

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