BNZ chief economist Tony Alexander has called on New Zealand leaders to require foreigners to build new places rather than buy existing Auckland houses.
Alexander's call follows the Herald's report that people of Chinese descent accounted for 39.5 per cent of the almost 4000 Auckland transactions between February and April.
Yet Census 2013 data showed ethnic Chinese who are New Zealand residents or citizens account for only 9 per cent of Auckland's population.
It comes amid warnings that rich Chinese investors will be looking to take their money out of China's turbulent stock market and invest it in property overseas.
The Guardian reported that estate agents in Australia, Britain and Canada are expecting a surge of interest from Chinese buyers.
Alexander wrote in his latest newsletter that New Zealand would do well to follow Australia's example and put restrictions on foreign buyers.
"We should as soon as possible adopt Australia's rules restricting foreign buying of anything other than new housing unless resident for 12 months," Alexander wrote.
Labour housing spokesman Phil Twyford, who released the data on which the Herald's reports were based, said: "It's staggering evidence that strongly suggests there's a significant offshore chinese presence in the Auckland real estate market."
Alexander called for more information on the topic.
"I do not fault Labour's housing spokesman Phil Twyford for releasing the data. But as with my own efforts to estimate offshore buying last year and in 2013 the data simply do not allow us yet to truly know what proportion of our housing stock is being sold to people who will never live here - be they Chinese, Albanian or whatever," Alexander said of the BNZ-REINZ survey.
He warned that requiring foreigners to build houses was not the absolute solution.
"Adopting Australia's rules as they stand won't be the panacea many are hoping for. In Australia's case people have been able to get around the restrictions quite easily. The regime is now being enforced more rigorously, but that does not necessarily alter what is being seen as a huge problem - something which people in Hong Kong have been seeing more and more of in recent years."
Alexander questioned the data.
"The real estate agency data released this week suffer a huge flaw in that one cannot identify whether the person with the Chinese name is in fact located offshore having no intention of living in New Zealand. Their family could have been in New Zealand since the Otago gold rush days of the 1860s. They might have migrated here in the wave from the late-1980s when we changed our migration rules to specifically reduce emphasis on English heritage and open the door instead to people based on measures of merit, regardless of where they were coming from," Alexander wrote.
Twyford questioned why there are 22,000 empty houses in the Auckland region and Alexander also raised that issue.
"Many Chinese who buy properties never, or rarely, occupy them. They sit empty. This applies even to newly built apartments sold to Chinese buyers. Chinese simply want an asset away from any control by the CCP," Alexander said.
Housing minister Nick Smith has dismissed Labour's housing data but said the Government's newly introduced requirement for all house buyers to have an IRD number and a New Zealand bank account from October would give far more accurate information on the extent of overseas investment in Auckland housing.
Last month, the Herald reported that China's easing of restrictions on privately held capital could result in Chinese buyers pouring US$10.9 billion into New Zealand real estate.
A report from real estate listings website Juwai.com, with 2.5 million properties and businesses for sale, studied the effects of the Chinese government's second phase of its Qualified Domestic Individual Investor (QDII2) programme to allow its citizens to buy overseas property.
Andrew Taylor, Juwai.com's co-chief executive, said rich Chinese were drawn to New Zealand.
"Juwai.com projects that the pilot program will enable US$11 billion of new Chinese money to flow into New Zealand's real estate market. That's based on wealthy Chinese investing 10 per cent of their assets into international property, including commercial. It's also based on NZ getting about 3.3 per cent of that property-specific investment, as it has in the past," he said.