If you’re in the market to buy a home in New Zealand, you might want to start considering other countries. That is, unless you’re actually from New Zealand. It was announced this week by Prime Minister Jacinda Ardern that starting in 2018, foreigners will be banned from buying existing homes in the country. The reason seems understandable, since recent market trends have made homeownership extremely difficult for many local Kiwis. That’s because over the past few decades, outside investors have come in and bought a hefty amount of property (especially in the nation’s biggest city, Auckland, where the average price for a home is now more than NZ$1 million, or $685,000).
The ban—which would not apply to Australians—would go into effect in a few months. “Foreign speculators will no longer be able to buy houses in New Zealand from early next year,” Ardern said at press conference in Wellington this week. “We are determined to make it easier for Kiwis to buy their first home, so we are stopping foreign speculators buying houses and driving up prices. Kiwis should not be outbid like this.”
In theory, the restriction should work, yet there is also reason to believe it won’t have much success. Both Hong Kong and Australia have attempted similar restraints on foreign housing investment with hopes of curbing rising real estate prices, but to little avail. Nevertheless, New Zealand’s government had to try something, since it’s currently the fourth most expensive property market in the world, according to Demographia, an organization that’s involved in urban public policy and demographic analysis. By the same metrics, Hong Kong is first, followed by Sydney, and Vancouver, B.C.