House sellers in Queenstown and Auckland are being warned the upcoming foreign buyer ban will hurt house prices.
Westpac bank chief economist Dominick Stephens says it is “very uncertain” as to just how great an impact the ban will have on the market, until it comes into effect in the next few weeks.
- Housing ranks top concern for New Zealanders – research
- Softened foreign buyers ban will help increase housing numbers - expert
Mr Stephens says it will, however, have a negative impact on New Zealand.
“We just don’t know how negative it is going to be,” he told RadioLIVE Drive.
Mr Stephens has compared the ban with an initiative in Toronto, Canada where a stamp duty on foreign buyers was imposed by authorities.
“Shortly after [it was introduced], Toronto house prices fell quite sharply – around about five percent.”
He told RadioLIVE Drive that New Zealand’s foreign buyer ban has “been watered down”.
“Foreign buyers will still be able to purchase 60 percent of the units in a housing development of 20 or more.”
Mr Stephens believes the effects of this could lead some foreign buyers to turn to purchasing new apartments, now blocked out of the housing market.
Auckland’s North Shore, Central City, Howick and Henderson-Massey districts and the Queenstown Lakes District will feel the impact most, Mr Stephens said.
Listen to the full interview with Dominick Stephens above.