On Wednesday it was announced that New Zealand Bans Foreigners from Buying Property in their new Overseas Amendment Bill.
The reason being is that they believe that overseas investors have inflated residential housing prices and therefore locals can’t afford to buy.
So, by taking foreign investor out of most of the market (apart from new apartment complexes) this will bring competition down and also prices.
It’s bad news for anyone who brought at a higher price… they must be terrified of negative equity on their mortgages catch up with them.
Yet, more than that, this will prove a good test for what will happen in the after math of Brexit. Inevitably, whilst the dust settles foreign investors will pause investing in the UK property market.
What effect that will have on the market is yet to be seen. Yet, in areas of high international investment it should have a similar impact to what NZ are just about to experience.
The drop in property prices will be indicative of a pattern we could see in the UK and therefore this will be an interesting situation to watch.
Looking forward, when the NZ property trends are released for quarter 4 at the end of the year, the full scale impact will start to become clear… Perhaps an insight into our own reality after BREXIT becoming clearer.
Do you also see the similarity between NZ and the UK? Comment below, I’d love to hear what you think about this!
Natasha
