Regional leaders reject Key's claim on Chinese buyers

Hastings Mayor Lawrence Yule said regions were open to overseas investment, but Mr Key's comments in relation to housing "did not ring true". Photo / Glenn Taylor

Regional leaders say they want foreign investment, but not in their houses, despite claims by Prime Minister John Key to the contrary.

Mr Key spoke yesterday about the other side of the housing crisis - the large number of Aucklanders who were getting wealthier as a result of rising house prices.

Discussing possible measures for foreign investors, he also said many people outside Auckland had told him they wanted Chinese buyers in their areas because they would increase the value of their homes.

The comments prompted claims from the Opposition that Mr Key was "out of touch" and speaking only for home-owners.

QV figures this week showed Auckland's average house values were rising by $511 a day, driven by high migration, lack of supply and low interest rates.

Mr Key said prices were "definitely going up more rapidly than Government would want".

He reiterated his opposition to a ban on foreign buyers, and said the Government was focused on increasing supply. But he also noted that many Aucklanders were benefiting from rocketing house prices.

More than 500,000 Aucklanders owned homes, he told Newstalk ZB, and "they are significantly wealthier".

"People say to me, 'Can we have a few of those Chinese buyers in Wellington and other parts of New Zealand because we want our house prices to go up'."

Local Government New Zealand president and Hastings Mayor Lawrence Yule said regions were open to overseas investment, but Mr Key's comments in relation to housing "did not ring true".

"The regions will welcome foreign investment but largely in the productive sector - where an investment can be made, a joint venture, or part of an integrated supply chain."

Thames-Coromandel Mayor Glenn Leach said overseas and Auckland investors were already pushing up house prices in his region.

He said the new money created "a Catch 22 situation", where residents became wealthier but others were locked out of the market.

This issue would intensify as rule changes for investors in Auckland encouraged investment in Coromandel.

Labour housing spokesman Phil Twyford said most Aucklanders' property wealth would not be realised unless they moved cities, and many in the city were tenants.

Sight-unseen purchases draw warning

Aucklanders snapping up out-of-town property unseen as they find themselves priced out of the Super City's inflated market have prompted warnings about the hidden dangers of not getting expert checks.

Real Estate Institute chief executive Colleen Milne said due diligence could save buying a house with defects or that didn't meet expectations.

Auckland-based builder and Home Inspections owner John Dedden said he was aware of many homebuyers who were skipping a builder's report, and this posed great risk for buyers.

"People think they are going to save money but in the long term it could cost many more thousands to rectify anything," Mr Dedden said.

Mortgage Link broker Stuart Wills said his clients usually completed due diligence, but he had heard of people buying houses unseen.

ASB Bank head of home lending Vince Clark said ensuring the property met expectations was important.

"It is extremely important for customers to conduct proper due diligence by using the appropriate professional advisers."

Advice for buyers

• Get a builder's report from someone who has experience in the industry and has good feedback.

• Get the company to provide a sample report first.

• If it's a private sale, it is unlikely the issue could be resolved without a builder's report.

- NZ Herald, NZME