Foreign real-estate investment
The first data under the new real-estate ownership reporting scheme is out. The Herald has a story and also includes a full copy of the report.
So, what proportion of Auckland property sales were reported as being to China?
In Auckland, the level of foreign investment was slightly higher than the national level, at 4 per cent, or 474 properties. Nearly 60 per cent of these properties went to Chinese tax residents.
That’s 60% of 4%, or a bit under 2.5%. Auckland is different; in the rest of New Zealand the majority of foreign (tax-residency) investors are Australians.
The LINZ report does a good job explaining the real limitations of `tax residence’ as a criterion, but it’s a lot better than any previous data we’ve had.
There were also questions about actual residency and intention to occupy a home, but these were harder to interpret because of property bought by companies or trusts, where the questions didn’t have a good answer.
I’d suggest starting with the report rather than the news coverage.
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 »
Many people seem to want just a single explanation and/or group of people to blame for the rapid increases in house prices. As a layperson, as far as I can tell, it seems like there’s a range of factors that have been pushing up prices. Overseas investors probably have some effect, but if these figures are close to correct, they’re probably not the main thing.
Still, more data is good, especially when not interpreted for you by politicians.
9 years ago
Bernard Hickey has an interesting take on the stats…
Mr Hickey said the actual figure for foreigners buying homes here could be anywhere between 3 and 48 percent.
http://www.radionz.co.nz/news/national/303532/foreign-buyers-'very-under-reported‘
(He really doesn’t have the face that I thought went with his voice.)
Somewhere I read that foreign students could earn 2% of the sale price if they put their name on the documents but someone overseas fronted the money.
9 years ago
Bad data is worse than no data at all. I would rather believe the estate agent working in Auckland who says 1 in 3 sales house she makes are to foreigners. It will eventually come out how purchasers hide their country of residence but by then it will be too late and the people who are meant to be keeping accurate stats will wake up too late too.
9 years ago
If the data were really that bad, I don’t think people would be going to so much effort to misrepresent them.
But suppose for the sake of argument that the figure really is 1 in 3, and this does mean non-resident foreign investors rather than the 37% of Aucklanders who were born overseas. “Too late” for what? Neither of the major parties has a plan to block foreign ownership of homes — and it would be hard to do so without banning ownership by trusts or companies.
Admittedly, NZFirst thinks even non-citizen residents like me shouldn’t be allowed to own homes, but I can’t see that ending up as law. If it did, I suppose it would bring down housing prices along with the rest of the economy.
9 years ago