David Seymour and Winston Peters.
Photo: RNZ
ACT leader David Seymour says New Zealand First advocated for a $5 million minimum sale price for any houses sold to foreigners under the new rules announced on Monday.
National and New Zealand First were locked in negotiations over the policy for months.
Before the election, National wanted a $2 million minimum.
Holders of an Active Investor Plus residency visa would be able to buy or build one home, worth at least $5m. It also requires at least a $5 million investment.
Seymour, currently deputy prime minister, told First Up on Tuesday the $5m minimum was what New Zealand First wanted.
“The ACT party, as a political party, has opposed, the foreign buyers ban. We take the simple view that a person’s property is theirs and they should be allowed to sell it to anybody who follows the law, regardless of passport.
“If the issue is there aren’t enough houses in New Zealand, then the solution is to build more homes.”
The ban was put in place under the Labour-New Zealand First coalition in 2018.
“We entered into an agreement with two other parties who, one of them wanted to make it $2m, the other one wanted to make it $5m, we would make it zero, but, you know, that’s where we got to – $5m.”
New Zealand First leader Winston Peters, who served as deputy prime minister in the first half of the coalition’s term, told Morning Report his party was happy with the outcome.
“We realised that there was far too much that was vague about the right to invest in this country. And when I say the right to invest in this country, we just couldn’t get this country to be attractive enough, and we had to do something about that.
“So one of the things was for people who are putting in $5 million or much more – and many have – they could buy a house of that value as well. Now, that leaves them only being able to access less than 1 percent of the market, but at least it’s an incentive for an investor to come to this country.”
Peters said house flipping by foreign owners was “rampant” before the 2018 ban.
“We were subject to some serious duplicity and cheating. So that’s why the total ban happened and this very, very, very minor adjustment will attend to the benefits of the investor.”
He said his party’s supporters would understand the relaxing of the foreign buyer ban “because they’re rational and reasonable”.
“They’ll understand that accessing less than 1 percent of the market, and that they as supporters can access over 99 percent of the market, does not mean competition for them.
“We’re talking about the very, very top end of the market, and the greater problems we’ve got for home access is at the lower and middle end of the market.”
Foreigners would also be limited to one house, Peters said, minimising their impact on prices for locals.
“They were coming in here and buying not one house, and buying as many as they liked. That’s the difference. This case, it’s buying at this very level and only one house or building a new house.”
Labour leader Chris Hipkins will be talking to Morning Report on the changes after 8am.
Previously he said more pressure at the top end would pull up house prices at the lower levels.
“The advice that we had in government is that you can’t disconnect the houses at the top end of the market from houses further down the market, because if you push up the price of homes above $5 million, the people who might otherwise have wanted to buy those move to the next bracket down.
“That pushes up the price of the next bracket down, which means further buyers push down into the lower bracket, and you actually push up the price of all homes.”
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