Editorial: Overseas property buyers are not the enemy within

An American couple were forced to sell the luxury Glasshouse property on Waiheke Island after failing to comply with conditions of the Overseas Investment Act. Photo / supplied

Editorial

EDITORIAL

New Zealand has long, enthusiastically reached out to the opportunities globalisation provides to access foreign capital.

This week we revealed an American couple have been forced to sell a Waiheke property for a large loss after faling foul of foreign buyer rules designed to protect sensitive land.

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Michael Rems and Julie O'Shea bought the six-bedroom, five-bathroom Glasshouse on Waiheke in June 2015 for $3.6 million. It was described in typical real estate marketing hyperbole as having "breathtaking" views towards Auckland and was rented for $1800 a night.

To all appearances, the couple followed our rules around such transactions to the letter and obtained Overseas Investment Office (OIO) approval for the purchase. A condition of the sale was that they move to New Zealand within three years.

At the time of approving the conditional deal in 2015, the OIO stated: "The applicants intend to immigrate to New Zealand and reside in New Zealand indefinitely. They intend to acquire the property to use as their home."

However, the pair - citing a change in family circumstances - did not relocate and sold the Waiheke property, in anticipation of the OIO forcing them to. An apartment in Remuera also purchased by Rems and O'Shea, although not needing OIO approval, was also put up for sale.

Asmall sector of New Zealand willbelieve the thwarted sale of land to overseas interests is a cause for celebration.

Only a year beforeRems and O'Shea's Waiheke Island purchase, NZ First leader Winston Peters said he intended to "put a stop to sales of land and houses to non-residents". It's an approach that appears to have a vocal but perhaps, given the total vote ratio for the party, somewhat diminutive following.

Far from applauding the forced sales of properties after interested families have tried to invest for their future, we should sympathise. Having the means to nestle, presumably anywhere else in the world, they chose Aotearoa. Who would argue that they had chosen wisely?

It is hardly healthy behaviour for a country up to its ears in debt to the rest of the world to tamper with that perception of a wise place to be. This is the absolutely wrong time to do it. Fear stalks the world's markets as a coronavirus pandemic spreads. Investors are hyper-sensitive to risk and putting a high price on it.

The Rems and O'Sheas of this world represent a welcome expression of interest in a country that should be as receptive as possible to overseas capital.

We have regulations to protect the wholesale loss of territory, assets or cherished sites. Such as is appropriate. But since when did we become a people who would celebrate others being forced to sell their home, at a substantial loss, due to "changed family circumstances"?

We should be particularly careful about the messages we send the world about investing in New Zealand. We have our attractions, which can too easily be interpreted as a siren calling the trusting, only to dash their raised hopes on rocks of disappointment.