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If you wish to feel the bark, bite and backlash of Winston Peters, suggest to him he’s unwinding the ban on foreign buyers buying houses in New Zealand. It drives him mad; you may lose a limb. Certainly you’ll be called a moron and publicly lashed and humiliated.
Nevertheless, it’s Peters who now looks as if he’s ready to renegotiate the so-called foreign buyers ban that he insisted on in the coalition agreement.
Why? To explain means a quick recap. The foreign buyer ban was introduced in 2018 by Peters and New Zealand First as part of its agreement to join the Labour-led coalition government. It came after much public angst and concern that New Zealanders were being outbid for our limited housing stock by people who had little care or concern for New Zealand. They were just snapping up our houses. The data was never clear on this, but the narrative stuck.
Peters whipped up a storm during the 2017 election about foreign ownership of our homes. Parents and grandparents worried their younger family members were being squeezed out of the housing market.
Too often, Kiwis chasing their home-ownership dream would end up at the conclusion of an auction walking away disappointed because they’d lost out to an overseas buyer. They’d stretched themselves, only to be pipped as the hammer fell. Sold! The overseas buyer wasn’t in the room, they weren’t in the country, they had bought the house, sight unseen, on the phone to a local agent.
Sometimes, these houses sat empty for months, if not years, but the value rose making it a great investment. No upkeep, no tenants, no care, no responsibility, no need to live in it – no tax paid on the capital value rising, no social contract with Kiwis. It was just a good safe investment – with the chance to make substantial tax-free gains.
The foreign buyer ban passed into law in 2018 as the Overseas Investment Amendment (OIA) Bill, preventing foreign speculators buying existing homes while living in other countries. For a nationalist party like New Zealand First, it’s ripe territory for campaigning on.
At the 2023 election, National’s policy was that the house had to be valued above $2 million, contingent on a 15% tax. Anything under that was off limits – for Kiwis only. National tried to loosen the rules during coalition talks but Peters stood his ground.
But now we need to start telling a new story because, it seems, the ban is no longer fit for purpose. It might have caused New Zealand to miss out on foreign investment, driving it away towards other countries, and we simply can no longer afford to miss out on these opportunities.
So, Peters is making announcements suggesting it will be tweaked. He’s made it clear that the foreign buyers ban will remain unchanged. He told media: “We’re talking about investment. We’re changing those rules and what goes with them. You have to be patient – and we’ll tell you what the details are.”
He’ll have to keep stressing that he’s not ditching the entire policy. After all, he campaigned hard on it and there were anecdotal reports of less competition for houses almost overnight. It’s an issue which goes to the heart of his credibility.
How will Peters sell changes to the New Zealand public and avoid us seeing it as a flip flop? He’s been around too long to fall down a trap door. In the end he’ll make it look like he’s saving us. So far, he says any reforms will be to investment visas and rules, and that the fundamentals of the ban remain.
Under the new agreement, an overseas investor who wants to buy a house in New Zealand might need to meet new criteria like investing in a business and employing Kiwis, and they might not be able to buy a house under a certain value. It could be that they’re limited to homes above $5 million.
This government appears to favour the top end of town: The suits, big business, tobacco companies, board members, directors and company chairs. It’ll need to be careful how any changes are presented so it doesn’t look like the usual story of rich folk winning, but ultimately I think Peters is doing the right thing.
He’s showing us he’s listening and understands how important overseas investment into New Zealand is. You can’t take significant investment into the country then deny those making it the chance to own a home here. It seems mean-spirited and nasty for a start and could be holding back overseas investors from making further investments in New Zealand. Peters knows it’s about jobs but at the same time, he’s protecting the majority of homes for New Zealand buyers. It’s only uber rich Kiwis who will go head to head with wealthy foreign investors.
Peters is in charge here. His move. His request. His negotiation. He’s out front. He’s doing the talking. Luxon will go with it; Act leader David Seymour would have done it months ago. Expect to hear about changes by the end of the year and expect Peters to front it, alongside Luxon.
