High taxes could push Asian buyers to New Zealand
A flurry of new taxes implemented in Asian property markets has prompted Asian house buyers to set their sights elsewhere, with New Zealand fast becoming a firm favourite.
The housing market took a bit of a hit in Singapore back in February, with the Government raising the tax – or stamp duty – on residential property purchases by up to 7%, limiting the amount of cash buyers can get and tightening loan-to-value rations between 10 and 20%.
Those with an interest in Hong Kong’s housing market did not fare much better, with a new property tax enforced for overseas buyers just before Christmas in a bid to cool buoyant home prices. Non-local and corporate buyers must now pay a 15% tax.
New Zealand may have fallen off Singaporean and Hong Kong investors’ portfolios over the past few years, according to David Bayley, Bayleys Real Estate director – but it is rapidly becoming a more attractive option.
With Australia overdue for a price correction, the US being seen as fragile and Europe’s instability, New Zealand is perceived as something of a safe haven. Mr Bayley said his firm had six Asian group bookings for Auckland visits.
“We first began seeing the impact of Hong Kong's new property investment tax restructuring in mid-December when we fielded a 12.2% spike in the number of inquiry calls from the region, and the number of website hits emanating from the area jumped 17.3%,” he said.
“Our apartment group for example is now regularly hosting families coming down to Auckland from Southeast Asia with the sole intention of buying CBD units for their children to live in while they attend university here.”
But while some enjoy the injection of interest in the property market, others have voiced concern that residents are being outpriced by the decision not to discourage sales to foreigners.
However, after surveying 10,000 agents in the monthly BNZ-Reinz Residential Survey, BNZ economist Tony Alexander found that only 9% of monthly house sales were to foreigners.