Duncan Garner: Winston Peters in charge of ‘unwinding’ the foreign buyers ban?

If you wish to feel the bark, bite and backlash of Winston Peters, suggest to him he’s unwinding the ban on foreign buyers buying houses in New Zealand. It drives him mad; you may lose a limb. Certainly you’ll be called a moron and publicly lashed and humiliated.

Nevertheless, it’s Peters who now looks as if he’s ready to renegotiate the so-called foreign buyers ban that he insisted on in the coalition agreement.

Why? To explain means a quick recap. The foreign buyer ban was introduced in 2018 by Peters and New Zealand First as part of its agreement to join the Labour-led coalition government. It came after much public angst and concern that New Zealanders were being outbid for our limited housing stock by people who had little care or concern for New Zealand. They were just snapping up our houses. The data was never clear on this, but the narrative stuck.

Peters whipped up a storm during the 2017 election about foreign ownership of our homes. Parents and grandparents worried their younger family members were being squeezed out of the housing market.

Too often, Kiwis chasing their home-ownership dream would end up at the conclusion of an auction walking away disappointed because they’d lost out to an overseas buyer. They’d stretched themselves, only to be pipped as the hammer fell. Sold! The overseas buyer wasn’t in the room, they weren’t in the country, they had bought the house, sight unseen, on the phone to a local agent.

Sometimes, these houses sat empty for months, if not years, but the value rose making it a great investment. No upkeep, no tenants, no care, no responsibility, no need to live in it – no tax paid on the capital value rising, no social contract with Kiwis. It was just a good safe investment – with the chance to make substantial tax-free gains.

The foreign buyer ban passed into law in 2018 as the Overseas Investment Amendment (OIA) Bill, preventing foreign speculators buying existing homes while living in other countries. For a nationalist party like New Zealand First, it’s ripe territory for campaigning on.

At the 2023 election, National’s policy was that the house had to be valued above $2 million, contingent on a 15% tax. Anything under that was off limits – for Kiwis only. National tried to loosen the rules during coalition talks but Peters stood his ground.

But now we need to start telling a new story because, it seems, the ban is no longer fit for purpose. It might have caused New Zealand to miss out on foreign investment, driving it away towards other countries, and we simply can no longer afford to miss out on these opportunities.