Tony Alexander in May 2013 looked at this issue. He found the following from sales data:
From these numbers we can derive the proportion of all house sales in NZ which go to buyers from offshore
who have no intention of shifting here – including half of the “Don’t Know” responses.
- Australia 0.4%
- China 0.6%
- Europe excl. UK 0.4%
- India 0.4%
- Other Asia 0.5%
- South Africa 0.3%
- United Kingdom 0.3%
- United States 0.4%
- Other 0.4%
- All 3.6%
So if you exclude Australia, Labour’s policy may reduce the number of buyers by 3.2%.
However also of note is 4.5% of sellers were based overseas.
Now remember this is based on actual sales data. Alexander summarises:
This is interesting because taking the many sampling uncertainties into account the proportion comes close to the proportion of sales we estimate are to people offshore who do not intend shifting to New Zealand – some 3.6%. The implication? There could be close to zero net transfer of NZ home ownership occurring to offshore investors.
I’d tempted to call the policy a snake oil solution. The data suggests it may have no impact at all on prices.