Foreigners buying 29pc of homes, not 3pc - lawyer

Photo / Greg Bowker

Foreigners are buying 29 per cent of New Zealand residential properties, not the low 3 per cent reported in official state data, a lawyer says.

Mary Anne Shanahan, a New Lynn-based conveyancing lawyer, expressed annoyance at interpretation of Land Information New Zealand (LINZ) data which shows extremely low transaction numbers for foreigners.

At the beginning of this month, LINZ released data showing that from April 1 to June 30, overseas residents bought 1749 out of the 57,678 homes sold in New Zealand. That amounts to 3 per cent of total sales over the three-month period - a similar level to the previous quarter.

But Shanahan said people had failed to add in foreigners here on work or student visas.

Those people had not been classified foreigners yet they clearly were, she said, because they are not New Zealand residents.

LINZ revealed that foreigners on work and student visas bought more than 8000 properties they intended to occupy and a further 4707 properties they did not intend to occupy.

That significantly boosted the numbers of foreigners buying here to about 29 per cent, Shanahan calculated.

She blamed the media and the Government for failing to examine the data closely enough and interpret it correctly.

"The New Zealand Herald has in its editorial quoted the 3 per cent number with the indication that those of us who know the number to be higher are xenophobic. This issue needs to be raised. As the Herald has put an awful lot of information about the current property bull market on the front page, I believe the analysis of these figures belongs on the front page. The general public has a right to know," Shanahan said.

But a LINZ spokesman did not agree and cautioned over how the figures were interpreted.

"Our data is not a register of foreign ownership. We've collected information for tax purposes as well as some information for housing policy," the spokesman said.

"The first part of our report is about the tax residency of buyers and sellers. It shows that 3 per cent of all transfers involved buyers with an overseas tax residency. This is the 3 per cent we've referred to, and is based on the responses of all buyers whether they're students, businesses, trusts or others," he said.

"For the second part, we've asked buyers or sellers whether there's a home on the land and about citizenship or visa status. The percentage Ms Shanahan has quoted from this page is only from properties that include a home on the land (ie not vacant sections nor businesses that don't include dwellings).

"We have also stated that the results to question 2.2 which she refers to should not be used. As the report says, analysis found that some buyers claiming the main home exemption, which is only available to New Zealand citizens and residents, have also responded as if they have work or student visas. We've included these figures and that disclaimer in the report for transparency, and are improving the guidance for answering this question so the results are more useful for future reports," he said.