Seventy-five homes in central Auckland were transferred to overseas people in the June 2019 quarter, Statistics NZ said today.
The latest figures showed the transfer of a total 939 homes in the Auckland inner-city, including 75 to people without New Zealand citizenship or a resident visa.
Transfers to overseas people was down massively on last year's figure of 321.
"Central Auckland home transfers to overseas people are down more than 70 per cent compared with the peak last year," said property statistics manager Melissa McKenzie
"This is similar to the number of home transfers to overseas people in mid-2017, before changes were proposed to the Overseas Investment Act.
She noted, however, some of these buyers may have bought apartments off the plans before restrictions on overseas home buyers took effect. "These only show up in our statistics once the apartment is built," said McKenzie.
Home transfers to overseas people in Central Auckland peaked at 321 transfers (22 per cent) in the June 2018 quarter, shortly before the Overseas Investment Amendment Act 2018 was passed, restricting the sale of residential land.
Of these, 153 homes were transferred to overseas people with Chinese tax residency in the June 2018 quarter – falling to 48 in the June 2019 quarter.
Across New Zealand, there were 183 home transfers to people who didn't hold NZ citizenship or a resident visa in the June 2019 quarter versus 1116 in the same quarter last year. Total home transfers numbered 37,695 and of those 0.5 per cent went to overseas buyers. A year earlier, total home transfers numbered 39,627 and 2.8 per cent went to overseas buyers.
A ban on foreign buyers took effect from October 22 last year and prevents most people who don't hold NZ citizenship or a resident visa from buying residential property in New Zealand.
Under the revamped act, there are exemptions for those who buy new apartments in certain developments, who add to New Zealand's housing supply, and for Australian and Singaporean citizens.
The second-highest proportion of homes transferred to people who didn't hold NZ citizenship or a resident visa was the Queenstown-Lakes district and involved 18 homes versus 27 a year earlier.
Regarding home transfers where the buyer's country of tax residence is taken into account, of the 37,695 in the June quarter, 93 were to tax residents of China only, down from 552 a year earlier.
Stats NZ answers frequently asked questions
How many 'foreigners' are buying New Zealand homes?
It depends how you define 'foreigner'. In the June 2019 quarter, of all home transfers:
• 81 per cent were to at least one NZ citizen
• 11 per cent were to corporate entities only (which could have NZ or overseas owners)
• 7.9 per cent were to at least one NZ-resident-visa holder (someone who can live and work in New Zealand for as long as they like)
• 0.5 per cent were to non NZ citizens or resident visa holders.
When Stats NZ talk about transfers to "overseas people", we mean the 0.5 per cent of transfers where none of the buyers were NZ citizens or resident-visa holders (excluding transfers where all the buyers were corporate entities). Stats NZ focuses 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 October 22, 2018. As transfers are not counted until completed, it wasn't as obvious in the December 2018 quarter statistics.
The new act prevents most people who don't hold NZ citizenship or a resident visa from buying residential property in New Zealand. For further information see Overseas Investment Amendment Act 2018.
Why is the number of home transfers to overseas people not zero?
The number of home transfers to overseas people may never be zero due to Overseas Investment Act exemptions (eg some new homes, and Australian and Singaporean buyers).
Some contracts signed before October 22, 2018 may take many months before they are completed and counted in these statistics. Apartments bought off the plans may not be transferred to an overseas buyer until construction is complete years after the contract was signed.
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?
Stats NZ 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.
How much New Zealand property is owned by 'foreigners'?
Stats NZ 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.
Can transfers of bare residential land be identified in these statistics?
No, Stats NZ 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.
Is the Overseas Investment Act being enforced?
The Overseas Investment Office enforces the Overseas Investment Act. For information on applications by overseas people to buy New Zealand property see Decision summaries and statistics. For information on enforcement where overseas people have bought property without appropriate consent see Enforcement action taken.
What about 'foreign' buyers in Australia?
The Australian Foreign Investment Review Board (FIRB) reports on approvals of purchases by overseas buyers. They also have registers for residential land, agricultural land, and water entitlements.
For further information see Foreign Investment Review Board (FIRB) 2017–18 Annual Report.
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. Stats NZ refers to the parties involved as buyers and sellers for simplicity.
Stats NZ knows 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.
Aren't there lots of people missing from these numbers?
Stats NZ has 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, Stats NZ also publishes 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. Stats NZ advises focusing on the statistics about visa or citizenship status (also known as affiliation).
What is the net change in 'foreign' ownership of NZ property?
Stats NZ doesn'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.