Chinese buyers cool on Wellington offerings
One of Wellington's leading real estate firms has tried to tap into the lucrative Chinese market, promoting the city's top properties at a Beijing real estate fair.
Tommy's Real Estate says it has a database of about 1000 people in China, but director David Platt says demand at the fair was muted and no properties had been sold yet as a result.
Its involvement in China comes amid intense scrutiny of foreign investors as the Government tries to curb house-price inflation, with opponents claiming foreign speculators are driving house prices up, and as special legislation is used to try to boost the housing supply in Wellington.
Tommy's promoted its participation at the "property extravaganza" in its monthly magazine last month, saying it expected it would attract buyers to the city.
But Platt played it down. "I think it's fair to say at this stage most of the Chinese that are looking to buy property here still appear to favour Auckland ahead of anywhere else in New Zealand," he said.
There were potential investors but "at this point we haven't sold any to them".
Tommy's featured six properties, but promoted all its listings.
Its database would be used to market "stand-out" properties.
Platt, who was concerned about the political sensitivity relating to foreign buyers, believed the lack of direct flights between China and Wellington was a barrier, while Chinese were probably following other investors into Auckland.
He did not expect the firm would return to the fair. "At this stage we haven't seen enough to warrant really spending a lot more money on it but if that changes our thinking will change."
Tommy's agent Zoe Smith, who organised the trip, said vendors asking about China prompted the visit, but she believed it would take a "few years" to break into the market there.
The number of homes sold to foreign buyers is unknown because of a lack of data, though foreign ownership seems to be concentrated in Auckland. Labour has said it is as high as 10 per cent while National has said it is as low as 2 per cent.
Recently released IRD figures showed 11 per cent of the 200,000 landlords claiming losses on New Zealand rental properties were based overseas, though this figure included New Zealand expats.
New Zealand houses are also among the most searched for by Chinese buyers, according to China's largest property search engine, Juwai, and interest has grown rapidly in the past several years - reportedly by almost 90 per cent last year.
A number of large real estate agents list with the company to promote New Zealand properties.
Labour's housing spokesman, Phil Twyford, said he thought the practice was confined to Auckland.
"Labour's view is that there's no benefit to New Zealand or New Zealanders of our houses being sold to offshore speculators, the only effect really is that it bids up prices to out of the reach of New Zealanders."
Wellington deputy mayor Justin Lester said he would welcome immigrants but did not support investment in rental housing.
"I think it's unhealthy for us as New Zealanders or for foreign investors to be investing in rental housing stock. We've done that to death."
Housing Minister Nick Smith said he was not aware of the promotion but said private companies were free to act as they saw fit.