Foreign buyers have snapped up one in every 10 homes sold in inner-city Auckland over the past three months - marking a significant drop off in activity ahead of a new ban on overseas investors.
The foreign buyer ban took effect on October 22 with many pundits expecting overseas investors to snap up as much property as they could before being barred from the market.
Yet foreign buyers bought just 9.8 per cent of the homes sold in Auckland's inner-city over the past three months to September, according to Stats NZ data released today.
This was less than half the 22 per cent of houses they snapped up in the June quarter.
Across the whole Auckland region, foreign buyers bought 4 per cent of the properties sold in the last quarter, and 2 per cent of all properties sold in New Zealand.
Stats NZ's property statistics manager Melissa McKenzie said the number of inner-city homes sold to overseas buyers last quarter was similar to the 9.3 per cent sold to them in the same three-month period last year.
"This may reflect seasonal patterns, but that will not be clear until we get a few more years' data. These results also may have been influenced by anticipated changes to the Overseas Investment Act," she said.
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The latest data covers the period before the foreign buyer ban came into effect.
The ban bars all foreigners - except for Australians and Singaporeans - from buying typical Kiwi homes.
However, overseas buyers will still be allowed to buy as much as 60 per cent of the total units on offer in major apartment complexes with 20 units or more.
The ban aims to give locals a better shot at buying their dream homes by preventing wealthy overseas buyers from outbidding them, while critics say its effect will be limited because foreign buyers account for such a small part of the market.
Senior research analyst from CoreLogic Kelvin Davidson said the Stats NZ figures appeared to show foreign buyer activity had tapered off after picking up early in the year in response to the ban being tabled in Parliament last December.
"I think there has been a rise in buying but it happened earlier," he said.
"It peaked - in terms of buying - in the first quarter of the year so ... they've seen it introduced to Parliament and thought, 'Well, this is coming, I'd better get in now'.
"And it's gradually tailed off since then."
CoreLogic and Westpac analysts expect the ban will potentially put a "dent" in house price values in Auckland and Queenstown - the two areas where overseas investors have been most active.
But both groups also say it is hard to predict how great an impact the ban will have on prices.
CoreLogic expects that the ban's effects will likely be offset by a continued shortage of houses in Auckland, which will keep house prices hovering at current value into next year.