Home transfers to people who didn't hold New Zealand citizenship or a resident visa fell over 80 percent in the March 2019 quarter compared with the same quarter a year ago, Stats NZ said today.
There were 204 home transfers to people who didn't hold NZ citizenship or a resident visa in the March 2019 quarter, down 81 percent from 1,083 in the March 2018 quarter. Total home transfers fell 3.5 percent over the same period.
"Overseas people acquired just 0.6 percent of homes transferred in the first quarter of 2019, reflecting law changes in late 2018 that introduced restrictions for overseas buyers," property statistics manager Melissa McKenzie said.
"The share of home transfers to overseas people peaked at 3.3 percent in the March 2018 quarter when the law changes were being discussed."
"Despite the large fall in the number of transfers to overseas buyers this quarter, it's unlikely to ever be zero, due to exemptions for some overseas buyers," Ms McKenzie said.
The Overseas Investment Amendment Act 2018 came into force on 22 October 2018 and prevents most people who don't hold NZ citizenship or a resident visa from buying residential property in New Zealand. There are exemptions for those that buy new apartments in certain developments, that add to New Zealand's housing supply, and for Australian and Singaporean citizens.
"Transfers aren't counted until a sale is completed, which can take a month or longer after the contract is signed. While the law change took effect part way through the December 2018 quarter, the fall in transfers to overseas people was more noticeable in recent months," Ms McKenzie said.
| 2017-04-01 | 4.1 |
|---|---|
| 2017-05-01 | 5.2 |
| 2017-06-01 | 5.2 |
| 2017-07-01 | 4.9 |
| 2017-08-01 | 4.3 |
| 2017-09-01 | 5.3 |
| 2017-10-01 | 6.3 |
| 2017-11-01 | 5.6 |
| 2017-12-01 | 6.1 |
| 2018-01-01 | 7 |
| 2018-02-01 | 7 |
| 2018-03-01 | 7.8 |
| 2018-04-01 | 5.5 |
| 2018-05-01 | 6.2 |
| 2018-06-01 | 7.6 |
| 2018-07-01 | 4.1 |
| 2018-08-01 | 3.4 |
| 2018-09-01 | 4.5 |
| 2018-10-01 | 6.1 |
| 2018-11-01 | 5.2 |
| 2018-12-01 | 3.2 |
| 2019-01-01 | 1.7 |
| 2019-02-01 | 1.3 |
| 2019-03-01 | 1.1 |
| 2017-04-01 | 1.5 |
|---|---|
| 2017-05-01 | 1.4 |
| 2017-06-01 | 1.4 |
| 2017-07-01 | 1.4 |
| 2017-08-01 | 1.3 |
| 2017-09-01 | 1.1 |
| 2017-10-01 | 1.4 |
| 2017-11-01 | 1.4 |
| 2017-12-01 | 1.9 |
| 2018-01-01 | 2.1 |
| 2018-02-01 | 1.6 |
| 2018-03-01 | 1.6 |
| 2018-04-01 | 1.3 |
| 2018-05-01 | 1.5 |
| 2018-06-01 | 1.2 |
| 2018-07-01 | 1 |
| 2018-08-01 | 1.2 |
| 2018-09-01 | 1.4 |
| 2018-10-01 | 1.8 |
| 2018-11-01 | 1.4 |
| 2018-12-01 | 0.8 |
| 2019-01-01 | 0.5 |
| 2019-02-01 | 0.5 |
| 2019-03-01 | 0.2 |
In Auckland, on a monthly basis, the share of homes transferred to no NZ citizens or resident visa holders varied from a high of 7.8 percent in March 2018, down to 1.1 percent in March 2019. On a quarterly basis, the number of homes transferred to that group went from 678 in the March 2018 quarter to 111 in the March 2019 quarter.
"In both Auckland and New Zealand as a whole, the fall in overseas home buyers this quarter coincided with about an 80 percent drop in home transfers to Chinese tax residents," Ms McKenzie said.
Frequently asked questions
How many 'foreigners' are buying New Zealand homes?
It depends how you define 'foreigner'. In the March 2019 quarter, of all home transfers:
- 82 percent were to at least one NZ citizen
- 10 percent were to corporate entities only (which could have NZ or overseas owners)
- 7.5 percent were to at least one NZ-resident-visa holder (someone who can live and work in New Zealand for as long as they like)
- 0.6 percent were to no NZ citizens or resident visa holders.
When we talk about transfers to 'overseas people', we mean the 0.6 percent of transfers where none of the buyers were NZ citizens or resident-visa holders (excluding transfers where all the buyers were corporate entities). We focus on this measure because it aligns most closely with the definition of 'overseas person' in the Overseas Investment Act 2005.
What about the Overseas Investment Amendment Act 2018?
The new Act affects contracts signed from 22 October 2018 and clearly impacted the March 2019 quarter property transfer statistics. As transfers are not counted until completed, it wasn't as obvious in December 2018 quarter statistics. The new Act prevents most people who don't hold NZ citizenship or a resident visa from buying residential property in New Zealand.
For further information see Overseas Investment Amendment Act 2018.
Why is the number of home transfers to overseas people not zero?
The number of home transfers to overseas people may never be zero due to Overseas Investment Act exemptions for those buying new apartments in certain developments, that add to New Zealand's housing supply, and for Australian and Singaporean citizens. Also, some contracts signed before 22 October 2018 may take many months before they are completed and then counted in these statistics.
Why do you talk about 'transfers' not 'sales'?
A transfer is not the same as a sale. Transfers often involve a sale, but there are many other possible reasons for a transfer (such as marriage settlements, boundary changes, trustee changes, and changes in the share of ownership).
Every sale is a transfer, but not every transfer is a sale. We refer to the parties involved as buyers and sellers for simplicity.
We know the number of transfers to overseas people because this information is collected on land transfer tax statements, which cover all types of transfer and not just sales.
How many of the corporate entities have 'foreign' owners?
Information on the ownership of corporate entities (by New Zealanders or overseas people) is not currently available, as it is not collected on land transfer tax statements.
How are trusts captured in these statistics?
We count a trust based on the visa or citizenship status of its trustees. If at least one trustee holds NZ citizenship, then the transfer is counted as a transfer to a NZ citizen.
Aren't there lots of people missing from these numbers?
We have information about the visa status or citizenship of virtually all people who transfer property in New Zealand. The only uncertainty is around the ownership of corporate entities that transfer property.
In addition to statistics about the visa status or citizenship of people who transfer property, we also publish statistics about their tax residency. The tax residency statistics include a large category for parties that are exempt from stating their tax residency on a land transfer tax statement (eg because the transfer involves their main home). The visa and citizenship statistics are not affected by this exemption, because these people are still required to state their visa or citizenship status.
Tax residency is not the same as nationality. We advise focusing on the statistics about visa or citizenship status (also known as affiliation).
How much New Zealand property is owned by 'foreigners'?
We do not currently have a register of property owned by overseas people. These property transfer statistics measure overseas involvement in property transfers in any given quarter, but not the total amount of property owned by overseas people.
What is the net change in 'foreign' ownership of New Zealand property?
We don't produce a measure of the net change in property owned by overseas people.
If you subtract seller statistics from buyer statistics to calculate a net change in home ownership, it is important to note that:
- between the time of buying and selling a home, owners can move between affiliations (eg a work-visa holder could become a resident-visa holder or NZ citizen)
- some types of affiliations may sell many newly built homes (eg corporate entities).
Therefore, net changes for a given affiliation could be understated or overstated.
Can transfers of bare residential land be identified in these statistics?
No, we can't currently identify bare residential land in these statistics, but it is included, along with homes, commercial, and other land, in total property transfers.
What about 'foreign' buyers in Australia?
The Australian Foreign Investment Review Board (FIRB) reports on approvals of purchases by overseas buyers. They also have registers for residential land, agricultural land, and water entitlements.
For further information see Foreign Investment Review Board (FIRB) 2017-18 Annual Report
Text alternative for Home transfers by buyer citizenship or visa status, June 2017 to March 2019 quarters
This stacked column graph shows the number of home transfers as a percentage by buyer citizenship or visa status (At least one NZ citizen, At least one NZ resident visa but no citizens, Corporate only, and No NZ citizens or resident visas) for the June 2017 to March 2019 quarters. Also indicated is on 14 December 2017, the Overseas Investment Act (OIA) amendment bill was introduced to Parliament, on 22 August 2018 OIA amendment got royal assent, and on 22 October 2018 OIA amendment came into force.
Data for this graph is available on table 1 of the following file.
