New Zealand’s government has taken a controversial approach to tackling the country’s rocketing house prices – by banning foreigners from buying there.

On Wednesday the government passed legislation that allows only residents of the country to buy homes.

‘This government believes that New Zealanders should not be outbid by wealthier foreign buyers,’ said Associate Finance Minister David Parker. ‘Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.’

Queenstown is set on the shores of Lake Wakatipu in New Zealand’s Southern Island

The housing market was previously open to worldwide investors, however foreign buyers have been blamed for driving up the price of housing, particularly in the Queenstown area, where they account for up to 5% of buyers, and a whopping 22% in Auckland.
House prices in Auckland have risen by up to 75% in the last four years, says The Guardian, and the country regularly tops world house price increase indexes.

However, statistics paint a more complicated picture nationwide where foreign buyers account for only 3% of buyers overall.

Foreigners with Kiwi residency and existing foreign owners aren’t affected by the ban. Australians and Singaporeans are also exempt, owing to existing agreements. But other overseas nationals eyeing a part-time home in the country will have to put their plans on ice – for now.

[Via Guardian and Global]

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