Labour has moved from wanting a total ban on foreign buyers of real estate in New Zealand (pre-election) to something akin to business as usual (post election).

Among those exempt from the watered-down "ban", due to become law on July 1, are buyers from Australia and Singapore.

In addition, foreigners will be able buy up to 60 per cent of any new complex of more than 20 units — so long as they rent them to people who are "unrelated parties" (good luck enforcing that condition).

Who's going to check and take responsibility for ensuring a foreign owner doesn't rent a property to their partner and co-habit? The rental agent?

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At one point, Labour said foreigners buying off the plan would have to sell the property once it was built, now they can rent it out or — even worse — leave it vacant.

What the Government's change of heart means is that foreign students can buy property on behalf of anyone prepared to fund the purchase — the purchaser just won't be able to occupy the property (again, good luck enforcing that).

What all this means is there will likely be more foreign landlords, and if Singapore can obtain an exemption to the half-hearted ban, then any other country can apply for one.

Meanwhile, the economists at ANZ bank suggest rents will rise as government policies dampen house price inflation. In short, because house price inflation is down to single figures, the risk of buying an investment property rises.

"The foreign-buyer restriction, combined with other proposed policies, may make capital gains look less assured or investment look more risky," write the bank's economists.

"Investors may seek to offset this by charging higher rents. Demand to live in a house is relatively inelastic compared to demand to purchase a house. This means increases in costs can flow through into rents relatively easily, as long as household income growth and the housing supply balance are amenable.

Indeed it is possible that this is already happening in advance of policy changes, with rental inflation having increased through late 2017.

"The increase in rental inflation in Auckland CBD (and the recent tick up in rental yields) suggests the current environment is conducive to rent increases."