Who is buying our real estate?
Interesting data in Stuff today:
The latest BNZ and Real Estate Institute residential market survey found 9 per cent of house sales were to people offshore.
Of those offshore buyers, 18 per cent were from Britain, 15 per cent from China and 14 per cent from Australia.
and many of the offshore buyers were immigrating, not just investing. In fact,
just 1.2 per cent of house sales in Auckland were to Chinese buyers not intending to move here.
The only thing the story is missing is some mention of how people got the false impression that high house prices were the fault of Chinese investors.
Could it have been something they read, perhaps?
Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »
Interesting~~
What about 91% local buyers who were originally Chinese (i.e. Citizen or PR now)? and maybe average price would also help? Definition of offshore buyers would be helpful.
Another interesting question maybe: how many of the local buyers were living in Christchurch 3 years ago?
The impression may come from lots of international students + tourists walking around? 20% Chinese and 10% Chinese give very different impression? Buying LV, Gucci? but not properties?
Also, out of the 9% offshore buyers, what’s average price?
12 years ago
Anecdotal evidence suggests that certain areas of the North Shore are particuarly popular amongst offshore Asian buyers. Clustering like this has an important effect, which is to raise the prices of areas surrounding the in-demand areas, so depending upon the size and extent of clustering, it could be some reasonably substantial areas are experiencing an “offshore Asian” effect. Assuming one cares of course. One could also argue that these kinds of cash buyers are a good thing in a property bubble in that they do not increase levels of debt leverage.
12 years ago
I was a Real Estate Agent for Barfoot & Thompson who supply staff weekly sales information .
On an average, I believe Asians would count for 60 % of house purchases on Aucklands North Shore.
12 years ago
The distinction between ethnically-Chinese New Zealanders and foreign investors is made only intermittently in the media, which is part of my point.
12 years ago
I saw a report that 8/10 of the top selling realestate agents are Kiwis of Asian decent suggesting that they sell to other Asians, new migrants or overseas investors.
Given sensibilites about competition for houses can we take surveys like this at face value (i.e surveys where respondents may have a stake in the outcome)?
12 years ago
Re your comment Thomas,
The only thing the story is missing is some mention of how people got the false impression that high house prices were the fault of Chinese investors.
How many real estate Auctions have you been to ?
The Asians bid at the last minute so as not to miss out..they are pushing up property prices no question whatsoever.
That is what I witness on Auckland`s North Shore .
And I would bet the same is happening in most other parts of Auckland.
I guess non Asian agents will be out of employ in the not to distant future.
12 years ago
“8 out of 10 of the top real estate agents are Asian” (presumably speak the right language at least). How do we know they are telling the truth given this is a hot (lucrative) potato?
12 years ago
“The Savings Working Group two weeks ago released their report on New Zealand’s
savings problem warning that we stand on the edge of an abyss. That terminology is
somewhat sensationalist and hopefully hasn’t panicked anyone into leaving the country in
case we go the same way as Greece and Ireland. Actually we already did that back in the
1980s when the economy had to be deregulated to face a changed world and the
government had to get its finances back in order after years of ballooning deficits.
One of the claims made in the Savings report is that migrants push up house prices and
therefore maybe if some controls were placed on immigration prices would not be so high
and we Kiwis would save through bank accounts and such like rather than buying each
other’s houses. They report cites a particular study showing that about a 1% of
population boost in immigration lifts house prices about 10%.
However there is another study of migration and housing which finds that looked at from
a local as opposed to national level one cannot find evidence of more than about a 0.2%
– 0.5% lift in house prices. This study also suggests that maybe it is not the migrants
(foreigners) affecting house prices if such an effect exists, but returning Kiwis – which is
what we will examine here.”
http://tonyalexander.co.nz/regular-publications/newspaper-column/impact-of-migration-flows-on-nz-house-price-inflation/
The Government dismissed the Savings Working Group Report based on this study.
“And 80% of our population growth in the last couple of decades has been the net
inflow of non NZ citizens ”
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
Who is right?
12 years ago
The Savings Working Group blamed high immigration for house price rises. The Government (and Tony Alexander) dissagreed, based on a study which claimed it was returning Kiwis who were responsible.
http://tonyalexander.co.nz/regular-publications/newspaper-column/impact-of-migration-flows-on-nz-house-price-inflation/
I would have thought the SWG were smarter than that The Government (I suspect) may have been captured by vested interests ( bank might be seen as a vested interest).
Were the Government to accept the findings of the SWG it would have had vast political ramifications. I note that in a speech Treasury economist Michael Reddell states that “80% of our population growth in the last couple of decades has been the net inflow of non NZ citizens”
http://www.treasury.govt.nz/downloads/pdfs/mi-jarrett-comm.pdf
I have to say I smell a rat (and if it is) it is a usefull rat.
12 years ago
I have been trying to distinguish between New Zealanders of Chinese background and foreign investors.
Worrying about the latter I think is largely pointless — they bring money into the country, and they don’t get to take the land away. If they are outbidding residents, that means more money in NZ.
Worrying about the former is frankly offensive.
12 years ago
Good old elitist attitude.
12 years ago
I don’t see anything elitist about the distinction between foreign investors and New Zealanders. Perhaps you could explain.
If you mean it’s elitist not to worry about foreign investors, I would direct you to the original post, whose whole point was that the data showed foreign investors were a very small fraction.
12 years ago