The foreign buyer ban has dampened overseas interest New Zealand property, Stats NZ figures show.
In the three months to June 2019, just 75 homes in central Auckland were transferred to people without New Zealand citizenship or a resident visa.
"Central Auckland home transfers to overseas people are down more than 70 per cent compared with the peak last year," said property statistics manager Melissa McKenzie.
"This is similar to the number of home transfers to overseas people in mid-2017, before changes were proposed to the Overseas Investment Act.
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She noted, however, some of these buyers may have bought apartments off the plans before restrictions on overseas home buyers took effect. "These only show up in our statistics once the apartment is built," said McKenzie.
Home transfers to overseas people in Central Auckland peaked at 321 transfers (22 per cent) in the June 2018 quarter, shortly before the Overseas Investment Amendment Act 2018 was passed, restricting the sale of residential land.
Of these, 153 homes were transferred to overseas people with Chinese tax residency in the June 2018 quarter – falling to 48 in the June 2019 quarter.
Across New Zealand, there were 183 home transfers to people who didn't hold NZ citizenship or a resident visa in the June 2019 quarter versus 1116 in the same quarter last year. Total home transfers numbered 37,695 and of those 0.5 per cent went to overseas buyers. A year earlier, total home transfers numbered 39,627 and 2.8 per cent went to overseas buyers.
A ban on foreign buyers took effect from October 22 last year and prevents most people who don't hold NZ citizenship or a resident visa from buying residential property in New Zealand.
Under the revamped act, there are exemptions for those who buy new apartments in certain developments, who add to New Zealand's housing supply, and for Australian and Singaporean citizens.
The second-highest proportion of homes transferred to people who didn't hold NZ citizenship or a resident visa was the Queenstown-Lakes district and involved 18 homes versus 27 a year earlier.
Regarding home transfers where the buyer's country of tax residence is taken into account, of the 37,695 in the June quarter, 93 were to tax residents of China only, down from 552 a year earlier.
House price figures for the quarter show that the foreign buyer ban has had a "massive" effect on the Queenstown property market. CoreLogic figures show prices dropped 2.2 percent in the three months to June and were 0.1 percent on June 2018 - the first annual decline since July 2011.
Kiwibank chief economist Jarrod Kerr warned this week that Auckland and Queenstown are at risk of further potential declines.
“Queenstown and Auckland are international markets, in particular Queenstown,” Kerr said. “A lot of buying was pulled forward leading into the ban. Prices in Queenstown are now falling and it looks like that will get worse.”
The data around the foreign buyers comes amid separate figures showing the level of investor activity following the Government's ditching of capital gains tax prosposal.
BNZ chief economist Tony Alexander says that while newly released CoreLogic figures show sales to investors have increased in 53 locations around the country, they haven't lifted in Auckland.
"The gains are in the regions where price rises have been strong and remain firm – but it is interesting to note that talk about speculators being greedy and such-like has died down as Auckland has flattened. Apparently in the regions such behaviour does not exist – or is it just unwoke to mention such behaviour outside of our biggest city?
"If investors were jumping back in I would expect to see it in Auckland and that has not happened."
- With Business Desk
