Realty bosses back foreign buyer register

Century 21 chief says overseas investors should build new houses to add to stock.

Two real estate bosses have now backed a foreign buyers' register.

Barfoot & Thompson chief Peter Thompson yesterday said the register made sense.

"I think there does need to be some form of establishing where these buyers are actually coming from," Thompson said.

Century 21 national manager Geoff Barnett agreed.

"I would not see it as a negative," he said. "We need statistics to help manage the country. I don't think it would change anything. I would not be out of favour of it. There would be mixed views throughout the industry, but not a lot of negatives."

Labour's data pointing to large numbers of China-based buyers speculating on Auckland residential properties did not surprise Barnett.

"It's confirming everyone's suspicions which have been held for a long time. Sydney has exactly the same thing. They have slightly different rules but they are still getting a lot of overseas investment. There are reports of bus loads or bus tours from China and India, going out to the suburbs and buying properties, about 10km from the CBD," Barnett said.

The Government has rejected a foreign buyer's register but a law change due to come into effect in October will give more information.

Barnett pointed to the value of foreign investment but said he favoured residential rules which encouraged new housing being built.

"I believe that overseas investment is good for New Zealand but I believe it should only be in new construction. The overseas investors should have to build new houses, not buy into the existing housing stock. That creates shortages," Barnett said.

"Then, if overseas investors come to New Zealand and develop houses, they are adding to the housing stock. I think that's a good thing. But I acknowledge those are not the rules in New Zealand currently," he said.

"I approve of Inland Revenue's new rules from October that all buyers must have an IRD number. Those controls are good because property values have traditionally risen over a long term and speculators should pay tax.

"I believe people should be taxed on the profits they make from a business and if it is your business to buy and sell houses, you should have to pay tax on that."