Homes for Kiwis plan may be a winner

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Last updated 06:18 29/07/2013

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Labour plan to bar foreigners from buying homes

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OPINION: It has to be said from the outset, Labour's newly minted "foreigner ban" on buying existing residential houses has a lot more going for it than the late and unlamented "man ban".

For a start there is not a big constituency of voters to turn off among property investors who are not even in the country. It reminds you of that old joke that the best people to tax are foreigners living abroad.

And it is a fair bet the idea will win public favour, given the overwhelming opposition to any sell-off of Kiwi assets that shows up in most polls. Prime Minister John Key tapped into it in 2010, when land sales rules were being revised, by voicing concerns Kiwis may become "tenants in their own land".

As such the policy announced by Labour leader David Shearer yesterday - which overlaps existing Green and NZ First policy - is about politics as much as it is about housing. It will also give Mr Shearer the welcome chance to front-foot an issue other than his leadership.

The bar would apply only to non- resident, non-Australian buyers of existing houses - new builds will be permitted because it increases the overall housing stock.

According to BNZ, 9 per cent of houses are sold to people who do not live here, and of those about one in five is an Australian buyer. So Labour would bar about 7 per cent of the satisfied demand - enough to make a difference. But it is just one of a series of measures, along with a capital gains tax and a more benign regime for first-home buyers than the one the Reserve Bank is poised to fire at the property market, in a key battleground for the 2014 election.

The ball is now in the Government's court to explain how it will shield first- home buyers from the effects of central bank rationing of loans. The supply of houses remains a more critical issue, though.

Labour's plan to build and on-sell 10,000 affordable homes a year - alongside a promise of more state houses - remains its most potent weapon.

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- © Fairfax NZ News

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