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NZ Realtors deny foreigners upping prices

Property Here - Tuesday, February 26, 2013

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Questions are being raised about foreign buyers' influence on New Zealand's housing market, particularly in Auckland.

For the first time, the BNZ-REINZ Residential Market Survey this month sought 572 real estate agents' views about overseas buyers.

It asked: "Are you noticing more or fewer buyers from overseas?" and said that was included in response to the increasing incidence of comments that Kiwis were being outbid at auctions by foreigners.

Agents were mute on the topic: not a single agent said they saw more foreigners.

"The results would not appear to support that claim in that a net 0 per cent of responding agents feel that there are more buyers from overseas," the survey said.

Agents were also asked where foreign buyers were coming from and said the biggest group was people from the United Kingdom followed by Chinese then Australians.

Foreigners' influence was also raised in an live chat with Auckland Council economist Geoff Cooper. He was asked whether house prices would be affected by foreigners parking their funds here as form of investment.

"Are there statistics on it?" a reader asked, but Cooper said the effect came down to basic economics.

"The economics of this is ... simple: if there is more demand, prices will increase. I have not seen any such data," Cooper said, but he mentioned the new BNZ-REINZ question.

One licensed agent working in the finance sector claimed Chinese buyers were sourcing money for Auckland houses from their home country at 0.5 per cent interest. He blamed them for pushing up prices and said people were too complacent about the situation.

Mini-vans of Chinese house hunters were cruising housing areas, he claimed.

But Peter Thompson, Barfoot managing director, said only a small proportion of auction bidders at his Shortland St rooms were Asian. And many of these could be residents or descendants of New Zealanders for many generations.

Ian Thornhill, a Barfoot agent, raised concerns about the situation last year, commenting after an Epsom deal when a Chinese investor bought a house then left it empty.

BNZ chief economist Tony Alexander plans to widen the scope of questioning in the survey.

"I think next month I may ask not just about whether foreign interest is rising or falling, but agents' perceptions of the level of their existing ownership," he said.

Yesterday, Alexander sent out this year's first edition of a series on growing with China, looking at some of the recent data on corruption in China, innovation, and surveys of the main things people are worried about.

"Why do Westerners fear or show disrespect for China when it has produced the biggest movement of people out of poverty in world history, has done more to provide an economic base for Africa than decades of Western aid have been able to achieve, has grown over 40 per cent since the global financial crisis while Western economies have struggled, has delivered trillions of dollars in cheap goods to Western consumers, and when China's history for five millennia is one of physical containment as a near land-locked civilisation?" Alexander asked.

Foreign buyers

NZ house buyers come from:
United Kingdom: 26.8 per cent
China: 24.4 per cent
Australia: 21.7 per cent
Other: 6.9 per cent
Europe (excluding UK): 6.1 per cent
Other Asia: 5.9 per cent
India: 5.5 per cent
USA: 2.7 per cent

Source: BNZ-REINZ Residential Market Survey