Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill

In the first part of this contribution I was making the point that the price of housing in a market, like any other market, is set at the margin. It is the price of new homes that is the strongest determinant of what the average price level across the market is going to be, and if it is true that there is excessive demand from overseas buyers—if we accept that just for a moment—then concentrating all of that demand on new homes and pushing up the price of new homes is going to push up the price of housing across the market. So the bill simply will not work the way it is designed, for very simple economic reasons.

Can I conclude by saying that this is part of a worrying trend that came out in the earlier debate this evening—and it is implicit in this bill as well—and that is that there is a rising tide of intolerance of foreigners and xenophobia in many of the bills and much of the debate that we have heard tonight. I think that as we look around the world it is actually a worrying sign that the once-proud, liberal Labour Party is bringing in bills such as this, and such as the Keep Kiwibank Bill, to the House, in part because it shows that it has no other imagination but in part because of the quite ugly underlying sentiment that is implicit in the bill.

I oppose this bill proudly. Thank you.

I am pleased to support my colleague Phil Twyford on behalf of the Green Party in this the first reading of the Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill. That is what this bill is about. I will tell you what is ugly—what is ugly is that New Zealand families of all nationalities and all backgrounds are being pushed out of their homes. That is why we support this bill, because it is one tool—one of many tools—that the Government can, and should, use to rectify this situation and to lessen the environment that favours houses being used as a business.

I want to talk a bit about Ōtara. My family are connected for, I think, four generations now to Ōtara. Ironically, Ōtara is where my grandparents’ generation was banished to, in a sense. Ōtara was the place where the poorer working-class families went to. Ōtara was the place where Māori and Pacific Islanders were sort of pushed to, because that is where it was OK. It is not a flash place; that is where it was OK for Māori and Pacific Island families to go to. So they did, and they put down roots. They put down roots for generations. My family house in Hamill Road is one that I remember for three generations of my family.

The houses in Ōtara and the families in Ōtara are being pushed out by the current crisis. They are being uprooted as investors and speculators—people using homes as a business—are able to overcharge rents and are also able to use the lack of rental protections to evict people and families just because they can charge those higher rents. So, yes, we do need to use every single tool that is available to us to rectify this housing crisis that is having real and dire consequences for New Zealand families right now—and that is what is ugly.

The housing crisis is big and real. Being locked out of housing used to refer to not being able to buy a home. Today being locked out of housing means being locked out of even renting a home.

We know this. I have been to Te Puea Marae twice in the past couple of weeks. I have been part of a Manurewa Marae cleaning bee—that marae is also preparing to respond to the failure that is currently happening in my own communities and trying to mop up the Government’s mess in terms of this housing crisis.

This bill is a tool that is fair and reasonable and will play an important part in rectifying the housing crisis. Actually, what we need is a Government that will get in, boots and all, and work across Government, across systems, and across communities to prioritise addressing the housing crisis urgently and in the long term. If we do not, what is happening today—the dire consequences that we are seeing today—will continue. Even if we did start today, we will still see the fallout for some years, and possibly decades, to come. So we also need things like a strong State housing programme. But, certainly, a restriction on overseas investments, on buying up homes in our country, is a wise and sensible thing to do. It is not all of what we have to do, but it certainly is one of the tools that we must be employing.

We support this bill because it has conditions in it whereby we would actually still welcome overseas investment if it was indeed to be able to funnel the benefit of that back into our country, back into allowing New Zealand families to purchase a home, and to increase the supply for New Zealand families. So, again, it is reasonable. There are things built into this legislation to still allow overseas buying to happen under certain conditions. So this is one good tool that we have to use.

What is this really about, though? This is really about trying to transform the environment that has resulted in the dire, ugly, brutal outfall that we are seeing today, where New Zealanders are living in garages, in cars, under bridges, and on the streets, or are just panicking in their rental property because there is no security in respect of whether they will be able to stay there, because it is too favourable—

The ASSISTANT SPEAKER (Hon Trevor Mallard): Order!

Have I gone over?

The ASSISTANT SPEAKER (Hon Trevor Mallard): You have gone over.

It is my pleasure to take a call on this, the Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill. National does not support this bill. We do believe that it is a supply issue.

Maybe I will just talk specifically to Auckland and maybe even my own electorate, and say that what we do have to do is build more homes and we are doing that. I can certainly attest that in my own electorate, in a subdivision called Millwater—if anyone wants to come up and visit; Phil, you are welcome to come and have a look—we have got houses, 10, 20, 30 houses, coming online each week, and that is mixed housing.

But one thing that we do have to get better at—and something that I believe has held us back, particularly in Auckland—is that we have to accept the fact that we have to realise that we need intensification. We have to be able to provide high-density housing, we have to provide medium-density and low-density housing, and certainly in my own electorate of Rodney there has been some resistance around high-density and apartment living. But I can tell you that I had a visit down here a couple of weeks ago from a year 13 class from Ōrewa College, and they want to stay in the area. They want to have different options and, actually, they are very happy to have access to an apartment to get themselves on to the property ladder.

I remember myself, when I was a young 21-year-old in Auckland just having recently graduated as a new policeman and wanting to get into my first home. Actually, I had grown up in East Coast Bays, a fairly nice area close to the beach.

💬 Phil Twyford: You couldn’t do it now, Mark.

Well, I had to move. I had to move into an area that was Helicon Place, which was called “Nappy Valley”. It was called “Nappy Valley” because they were all low-cost houses, and that was the way I actually got myself into the housing market. So we just have to be more clever and more open to the fact that we have got to deliver different forms of housing so that our young people, especially, have got access and can actually get on to the property ladder. Thank you.

I am sorry that the members of the National Party in this House are not supporting this bill, which is a common-sense and rational response to a failed housing market. How do we know it has failed? It is because we have the lowest homeownership rates in 64 years. It now takes 50 years, on average, to pay off the average Auckland house. We know it is failing because we have an epidemic of families living in cars, garages, and campgrounds, and that that overheated and failed housing market is made worse by an influx of uncontrolled foreign investment that is driving house prices higher and higher.

There are many other countries, particularly around the Pacific Rim, that have enacted measures that are similar to my bill—to Labour’s bill—to try to control the destabilising effect of uncontrolled foreign investment in the housing market. It is the policy of the Australian Federal Government to ban non-resident foreign buyers from buying existing properties. If people want to invest in real estate and they are not a resident and they are not a citizen, they have to build a new house and thereby add to supply. That policy has channelled $30 billion of foreign investment into the construction of new homes in Australia in the last 12 months.

I want to refer the House to recent statements by the Prime Minister of Canada, Justin Trudeau, who had this to say about Vancouver. Vancouver is a very nice city, as anyone who has been there will attest, but it bears many similarities to the Auckland housing market. It is incredibly expensive. Justin Trudeau said recently: “An influx of capital from Asia is partly responsible for soaring house prices in Vancouver … We know that there is an awful lot of capital that left Asia in the past few years. Obviously overseas money coming in is playing a role [in the Vancouver housing market].” He has just launched an investigation into the impact of foreign buyers in the Vancouver and Toronto housing markets.

Singapore, Malaysia, Hong Kong—they all have restrictions, like my bill, or stamp duties, which are designed to restrict the destabilising effect of uncontrolled foreign investment in the housing market. In Beijing and Shanghai non-resident buyers cannot purchase residential real estate in those cities. Why? Because the Chinese Government is committed to protecting the economic interests of the people who live in those cities.

The Government has cynically downplayed the impact and the role of foreign buyers in the housing market here. For years it refused to collect the data on the presence of foreign buyers in the housing market, in spite of the fact that in both Australia and the United Kingdom it is the policy of Governments in those two countries to have a searchable and transparent register of foreign property ownership. From 1 October last year the Government required non-resident foreign buyers to register with the Inland Revenue Department, and recently Land Information New Zealand released the data it had collected over that 6-month period. The Government cynically tried to say that it showed that only 3 percent of the transactions during that 6-month period went to foreign buyers, but it had excluded 45 percent of the transactions from the data set that it used to calculate that 3 percent, so the data showed nothing of the sort. It was meaningless. It made no useful contribution to the public debate about the impact of foreign buyers in the housing market.

Even more damaging for the National Government’s credibility on this issue was that the four Australian banks have now stopped lending to foreign buyers. They have stopped lending to foreign buyers. Who do you believe: the National Government when it says that foreign buyers have no impact on the housing market, or the four Australian banks that completely dominate lending for mortgages in this country? That, in a single stroke, demolished what little credibility the Government had left on this issue.

National wants to make this an issue of race. It is telling the 64 percent of New Zealanders who want to see Labour’s policy enacted—National is telling those people, and the 54 percent of their own voters who want to see Labour’s policy enacted—and who say that they want a Government to put the interests of young Kiwi homebuyers first that they are xenophobic. That is the definition of being out of touch. Those members are utterly out of touch. They stand on the side of foreign, non-resident speculators against the interests of young Kiwi first-home buyers.