Supporters of the Government's overseas buyer ban would have been heartened by recent headlines. "Foreign home sales fall off a cliff," said one. "Home sales to foreigners drop by 81 per cent," read another.
Surely this is confirmation that the ban was necessary and has worked? Well, not so fast.
An 81 per cent drop in any set of numbers sounds huge, but in the case of overseas buyers it's an 81 per cent drop on the number of foreigners who were buying New Zealand homes before the ban was put in place.
And that number was just 3 per cent. Yep, you read that right: just 3 per cent of sales of Kiwi homes were going to overseas buyers, according to Stats NZ.
So, if the numbers were so small, why was the ban required to begin with? The answer is tied up in politics rather than economics.
It's human nature to look for a reason why things happen, and the rapid escalation in house prices — particularly in Auckland — from 2012 onward had many trying to find a scapegoat.
So when Labour suggested, back in July of 2015, that people of Chinese descent had bought 39.5 per cent of house sales in Auckland between February 2015 and April 2015, there was no shortage of people willing to accept that claim (if not necessarily its numbers).
Labour had reached that figure by counting "Chinese-sounding names" among home-buyers — a methodology strongly condemned by most commentators.
The then National Government moved to put more accurate numbers around the impact of house sales to overseas buyers — introducing a buyers' register and delegating the task to Land Information NZ (LINZ).
LINZ reported back in May 2016 that just 3 per cent of home sales in New Zealand in the first three months of 2016 were to overseas residents and that, of these sales, almost as many were to Australians as to Chinese buyers.
The LINZ figures were in turn disputed by those who claimed that they didn't include sales made to Chinese trusts or company structures.
But even assuming the LINZ numbers were out by 100 per cent (highly unlikely), that would still mean all non-residents accounted for only 6 per cent of home sales — a far cry from the almost 40 per cent claimed a year earlier.
This may have been where the matter rested. But in 2017, Labour came to power in coalition with New Zealand First, and a ban on overseas buyers was passed into law in August 2018.
By any reasonable analysis — at 3 per cent (or even 6 per cent) of all sales — the ban was only ever an exercise in political puffery and point scoring. But there are still those who believe that it "saved" the housing market and was responsible for the flattening off in Auckland house prices. This is nonsense.
The end of escalating house prices in Auckland was consistent with the four-decade-old property cycle and happened right on cue. The ban simply wasn't a factor.
Of course, some might argue that banning non-resident buyers at a time when we have a housing shortage was a prudent thing to do anyway, and on that score the Government's decision to allow non-residents to continue to invest in new dwellings was a smart move, because it focuses activity on the part of the market which most needs investment.
But has the ban really been a success? Clearly not. The drop in overall housing sales is so small as to be within the statistical margin of error, and the rhetoric in the debate around its introduction was almost all about "Asian" buyers — not Australians or Brits, or Canadians, also big buyers of houses.
As a result, it's hard to escape the feeling that the ban was more of a victory for political virtue-signalling a rather than good economic management.
• Ashley Church is the former CEO of the Property Institute of New Zealand and now writes on behalf of OneRoof.co.nz