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New Zealand Foreign Buyer Ban Stalls Luxury Home Sales

New Zealand's 2018 ban on foreign buyers has significantly hampered the sale of luxury homes to international clients, as illustrated by a $17.5 million mansion in Auckland remaining unsold for over 18 months. The Labour government introduced the ban to make housing more affordable for locals by limiting foreign demand, which has inadvertently restricted the pool of buyers for high-end properties.

The opposition National Party has proposed a policy to allow foreign purchases of properties valued over $2 million, subject to a 15% tax. They argue this could attract investment and generate significant tax revenue. However, critics warn that such a move might reignite a housing bubble, benefiting real estate agents and property investors more than ordinary New Zealanders.

New Zealand Sotheby's International Realty has reported increased interest from the US, Hong Kong, Singapore, and the UAE following the National Party's proposal. Despite the foreign buyer ban achieving its goal of cooling the housing market, it poses challenges in selling luxury properties to ultra-wealthy international buyers, a key segment previously driving the market. The policy's future hinges on gaining support from Winston Peters' New Zealand First party.

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