Discussion about non-residents buying Auckland houses raises fears Chinese will be deterred from investing here.

The debate about non-resident Chinese buying Auckland houses could hurt bilateral relations and Labour has already done "immeasurable" damage to the links between the two countries, says a top boss.

Pat English, executive director of the New Zealand China Council, expressed deep concern about what he called "elements" of the debate about foreign house buyers, saying the arguments had quickly descended into being about race.

"New Zealand has a superb relationship with China. But Labour has done immeasurable damage to that relationship, due to where the debate has ended up," English said.

Pat English. Photo / NZME.
Pat English. Photo / NZME.

"Very quickly, it went to race and if you look at the blogs and web sites, you will see some pretty hurt angry people. I just don't know [if] using names and an ethnic profile is the way to go about it."

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Phil Twyford, Labour's housing spokesman, released information showing 39.5 per cent of Auckland residential sales were to people with Chinese surnames despite them only making up 9 per cent of Auckland's population.

Twyford says if people disagree with the data, they should release their own information to disprove it and he says the issue is so serious that it cannot be ignored.

English is now afraid that Chinese people considering moving here and intending to make a big contribution to New Zealand might now be deterred due to "elements" of the discussion about non-residents buying the houses.

English, who lived in China for 13 years, said many New Zealand Chinese were suffering after Labour's data about house buyers was released.

"They're really sensitive about it. New Zealand's trade with China in the last few years was the difference between our economy going forward and backwards, such was the volume of that growth," English said.

His comments followed former deputy Prime Minister Sir Don McKinnon, chairman of the New Zealand China Council, calling for a national debate on housing that avoids sending mixed messages to valued overseas partners. "The $6 billion increase in our exports to China over the last five years probably kept the New Zealand economy out of recession, especially as traditional markets like Australia shrunk over the same period," McKinnon said in a Herald opinion piece.

"Housing is a complex public policy problem requiring action on multiple fronts. Auckland needs to ensure the supply of land and houses meets the demand. This means gathering definitive evidence on all contributing factors, including offshore investment," McKinnon said.

English agreed and hoped the Government's October move to make non-residents have a New Zealand bank account and an IRD number would help.

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But he also believed Auckland was partly to blame, suffering serious structural and land issues which have resulted in people attacking the wrong target.

Meng Foon, New Zealand Chinese Association national president, also criticised Labour's figures.

"Why would you publish figures that highlight the fact that Chinese people are overheating the property market sort of like in a secret way where you haven't revealed where your sources come from, you haven't identified correctly whether they're New Zealand Chinese or overseas Chinese ... just be a bit more transparent," he told Radio New Zealand this week.

NZ-CHINA RELATIONS

• NZ diplomatic posts in Beijing, Shanghai, Guangzhou, Chengdu, Hong Kong.
• NZ annual exports to China $11.3 billion in September 2014.
• Target of $30 billion by 2020 in two-way goods trade under NZ Inc China Strategy.
• China has surpassed Australia to become our top export destination.
• Agricultural products are the bulk of NZ's exports to China.
Source: Ministry of Foreign Affairs & Trade.