Monday, 6 November 2017

The New Zealand 'experiment' comes to an end with banning non-residents from buying housing

New Zealand is being presented as the poster child for Brexit:
Futures Forum: Brexit: and free markets and New Zealand
Futures Forum: Brexit: and learning lessons from New Zealand

Thirty years ago, the country launched into an 'experiment' with its economy:
Rogernomics - Wikipedia
Can the Kiwi economy fly? | The Economist
New Zealand "experiment" a colossal failure - Jane Kelsey
The FIRE Economy: New Zealand’s Reckoning - By Jane Kelsey | Scoop News

The free-market think tank the New Zealand Initiative is firmly behind the NZ 'experiment': 
Home | The New Zealand Initiative
New Zealand Initiative - Wikipedia
Who is behind the New Zealand Initiative? « The Standard
Roundtable and NZ Institute morph into new libertarian think tank | The National Business Review

The problem for the likes of the NZ Initiative is that the new government in Auckland is going in the wrong direction:
The New Prime Minister of New Zealand: Vacuous, Sinister, Dishonest, or Clueless? | International Liberty
New Zealand’s New PM is Clueless about Capitalism - Foundation for Economic Education - Working for a free and prosperous world

Especially when it comes to housing:
New Zealand Bans Foreign Home Buyers After Price Surge - Bloomberg
New Zealand to Ban Most Foreign Investors From Buying Houses - WSJ

New Zealand bans foreign home buyers

Houses in Oriental Bay in Wellington, New ZealandImage copyrightGETTY IMAGES

New Zealand will ban foreign buyers from purchasing existing homes in the country in an effort to cool soaring property prices.
Prime minister-elect Jacinda Ardern said the ban only applied to non-residents.
The country is facing a housing affordability crisis which has left home ownership out of reach for many. Low interest rates, limited housing stock and immigration have driven up prices in recent years.
Foreign ownership and a housing shortage in New Zealand's bigger cities were prominent issues in the run-up to the September election, which saw the end of nine years of rule by the conservative National Party.
"We have agreed on banning the purchase of existing homes by foreign buyers," Ms Ardern said on Tuesday, while also announcing plans to slash immigration and focus on job creation.
The prime minister-elect has previously described capitalism as a "blatant failure" when it came to providing homes for the poor.
The ban follows fears that overseas buyers of homes were putting too much pressure on infrastructure and house prices. Chinese investors have been among the biggest offshore buyers of property in the New Zealand market.

Price growth

The rise in New Zealand house prices over recent years has been fuelled by strong immigration, low interest rates and limited housing supplies.
House price growth in the country, home to about 4.6 million people, has moderated over the past year, but remains among the highest in the world. A recent survey by property consultants Knight Frank found annual house price growth in New Zealand was 10.4%, pushing it from 3rd to 10th place in the ranking of 55 housing markets.
Prices in the capital, Wellington, rose 18.1% in the year to June 2017. Residential prices in Auckland, the country's largest city, rose 9.8% over the same period. The median price for residential property in Auckland is $845,000 ($582,662; £443,554), according to data from the Real Estate Institute of New Zealand.

New Zealand bans foreign home buyers - BBC News

The director of the NZ Initiative sees it otherwise:

"... unaffordable housing is almost everywhere and every time caused by the same factor: housing supply restrictions. 

"The more restrictive the market, the more prices will increase over time."

Devon Live - Latest local news, sport & business from Devon
Futures Forum: "Devon is one of least affordable places in the world to buy a house"

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