Updated: 6:15am – The government’s plan to ban foreigners from buying homes in New Zealand will make no dramatic difference to the market, real estate agents say.

Prime Minister Jacinda Ardern yesterday announced Labour would make changes to the Overseas Investment Act to classify residential housing as “sensitive”.

It stops non-residents and non-citizens from being able to purchase existing houses, although they can still buy land to build on.

However, Australians would be exempt.

Real estate agents have told RNZ they did not believe the change would have much impact because foreigners make up such a small part of the market.

Auckland agent Graham Wall said many of the foreign buyers his company dealt with were Australian anyway.

“Most of the expensive properties we’ve sold lately have been to New Zealanders returning home.

“Eighty percent [of houses sold] would be to Kiwis, so it’s not a dramatic change for our business.”

Grant Henderson from Bayleys in Wellington said foreign buyers were rare in the capital.

“I would suggest that it’s probably as low as under 1 percent,” he said.

“We’ve had a lot of people from Auckland coming down here to buy properties for their children going to university.

“We just haven’t seen that influx of foreign nationals purchasing property, it’s been more people coming from out of area.”

Mr Henderson said the changes might create a little more paperwork but that was likely to be the extent of it.

Infometrics economist Gareth Kiernan said many foreigners had already been squeezed out of the market by the banks toughening up restrictions on foreign investors.

“It has become more difficult … it’s not impossible of course.

“In terms of the effect of the policy, it will completely remove any remaining foreign buyers from the market, but I expect a sizeable chunk of them have disappeared from the market over the last year or so,” he said.

Featured Image: Photo: RNZ
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