Barnett’s comments followed the Government’s rejection of a foreign buyers’ register but a law change due to come into effect in October would provide more information.
He said Labour’s claims of excessive speculation by offshore Chinese investors in the Auckland housing market were not surprising.
“I don’t believe the reported quantum is quite right but nonetheless the issue has confirmed many peoples’ long-held suspicions.
“However, let’s not forget NZ needs overseas investment to help drive our economy and so there is absolutely nothing to fear.”
While Barnett believed foreign investment in the housing sector was good for this country overall, he said it should only be in the area of new residential construction and the Government should consider changing the law to reflect that.
“If overseas investors had to build new houses rather than buying into the existing housing stock, it would help the levels of housing stock while helping the economy with more jobs and the flow-on effects that creates.
“It’s their buying of our existing stock that is creating the concerns around ongoing shortages, so enforcing a rule around them having to build new will help everyone.
“They get to invest and our housing stock increases, which is the real issue we should be addressing.”
Barnett supported the Government and IRD changes from October that tightened up on speculators. He noted over the long term, properties always increased in value and investors should be taxed on those increases.
“I support Inland Revenue’s new rules that will ensure all buyers must have an IRD number and those in the business of buying and selling houses should be taxed on the profits they make from that business.
“That makes good sense but we can still do more.”
