The BBC reported today (16 Aug) that New Zealand's parliament has banned non-resident foreigners from buying existing homes in the country. The reason for the ban is to make properties more affordable for its own citizens.
New Zealand is now facing a housing affordability crisis which has left home ownership out of reach for many Kiwis.
The bill to ban non-resident foreigners from buying New Zealand properties was passed by its Parliament yesterday (15 Aug). Non-resident foreigners are now banned from purchasing most types of homes - but they can still make limited investments in new apartments in large developments.
However, Australians and Singaporeans are exempted from the ban altogether because of free-trade agreements between NZ and the two countries. Also, foreigners with residency status in New Zealand are not affected by the ban.
Putting New Zealanders first
Foreign home ownership has been a big issue in the run-up to last year's election in New Zealand. The pro-immigration National Party ended its nine years' rule last year when the centre-left coalition government led by Labour's Jacinda Ardern, the country's youngest female leader, won the general election.
The ban follows fears that foreign buyers were putting too much pressure on NZ's infrastructure and housing prices. A survey last year shows that 54 percent of people in Auckland and Hamilton blame Asians for the rising housing prices in NZ. And among the Asians, mainland Chinese investors are the biggest and most active property buyers.
Average prices in New Zealand have risen more than 60% in the past 10 years, while in Auckland, they have almost doubled.
"This government believes that New Zealanders should not be outbid by wealthier foreign buyers," New Zealand's Trade and Economic Development Minister David Parker said.
"Whether it's a beautiful lakeside or ocean-front 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."
No restriction to foreigners buying properties in Singapore
In the case of Singapore, however, there is no restriction for foreigners (PR or otherwise) to buy the following types of properties in Singapore, according to information on the Singapore Land Authority (SLA) website:
- Condominium unit
- Flat unit
- Strata landed house in an approved condominium development
- A leasehold estate in a landed residential property for a term not exceeding 7 years
- Shophouse (for commercial use)
- Industrial and commercial properties
- Executive condominium unit, HDB flat, HDB shophouse (under HDB eligibility guidelines)
For landed properties, the foreign person will need to get an approval from the government to buy one. This is supposedly on a "case-by-case basis", said SLA:
- Vacant residential land
- Terrace house
- Semi-detached house
- Bungalow/detached house
- Strata landed house (e.g. townhouse or cluster house)
- Shophouse (for non-commercial use)
- Association premises
- Place of worship
- Worker’s dormitory/serviced apartments/boarding house
Inderjit Singh speaks up for Singaporeans
In 2013, former MP Inderjit Singh tried to speak up for Singaporeans in Parliament:
"This brings me to the point of how many Singaporeans are feeling about the presence of such huge numbers of new citizens, PRs and foreigners amongst our midst. First for housing - there is no doubt that the influx of foreigners in Singapore has driven up our property prices. PRs are buying HDB flats from the open market which drives up prices.
Just last week I had a dialogue session with my private estates residents and one of my residents complained that a new citizens recently bought a landed property in this old estate and was building a 3 and a half storey towering house. Well the, new citizen, the owner of the house was also present and when, I spoke with him during the tea session I found out that he was a new citizen formerly from China, just gained his citizenship and bought not 1 but 3 landed properties in Kebun Baru alone. I was surprised and saddened because many Singaporeans cannot afford to do the same, and this new citizen, no matter how he may have made his wealth is able to do so.
Many young Singaporeans I talk to, especially those who have recently graduated and have just entered the workforce feel demoralized because many of the things that they grew up aspiring to have are now beyond their reach. Our aggressive growth strategies, which allowed cheaper foreign workers, including professionals to easily gain employment passes degraded or depressed wage levels of many Singaporeans, not just the lower income Singaporeans.
I remember when I started work in 1985, my salary was $1900 as an entry level engineer. After a few years I could afford a house and a car. Today, 28 years later, an entry level engineer in Singapore earns $2600, just $700 more than what I earned when I started. The mathematics is very simple, the cost of living did not just go up by 1.3% per annum the last 27 years and even more, the cost of owning a HDB flat is did not just go up by 37% since 1985."
By the last GE in 2015, he was no longer an MP.