Real estate agency boss fears 'Fortress NZ' under new Government

"We're back to Fortress New Zealand," says a property boss of the new Government's policies to ban house sales to foreigners.

Geoff Barnett, Century 21 New Zealand national manager, said he was personally concerned about this country's direction and he predicted the new Government could have a severe effect on wealth, house prices, trade, economic growth, job supply, access to skilled workforces and opportunities.

"We've had a free economy. We've traded freely with the world but from now on, we won't. We'll become an isolationist economy," predicted the real estate agency chain's boss after NZ First's promise to 'slash' immigration.

Labour leader Jacinda Ardern expects agreements with NZ First and the Green Party to be signed off and released early next week but some details were already confirmed in media conferences, including an agreement to restrict sales of residential land and farmland to New Zealand citizens and permanent residents who live in New Zealand.

Barnett expressed concern.

"Fortress New Zealand will take us back to when we had walls up to the rest of the world," Barnett said of NZ First policies which he likened to those of late prime minister Sir Keith Holyoake who came to power in 1957, then from 1960 to 1972.

"Winston will almost drive us back to the Holyoake years," Barnett said of the NZ First leader, predicting the economy would be more akin to that of the late Sir Robert Muldoon.
"I remember 66c tax in the dollar, prices freezes, wage freezes," Barnett recalled.

NZ First's "common sense" policies say the party will "impose strict controls over foreign ownership, restrict ownership of residential land and farm land to New Zealand citizens and permanent residents." The party says it will be "slashing 72,400 foreign migrants net who entered New Zealand over the past year with most settling in Auckland."

But experienced Auckland-based property investor Olly Newland says some NZ First policies could be very good for this country, particularly assistance measures to help first-home buyers get affordable homes.

NZ First says it recognises the housing crisis and will "provide first home buyers with affordable residential sections under long-term low interest sale and purchase agreements of up to 25 years."

Newland said: "That's a good thing. It's not forever. The buyers get to own the land."

But he not keen on foreigners being banned from buying New Zealand housing: "They can't take the houses with them, they don't take them anywhere," Newland said of absentee landlords. "I'm not against foreigner buyers."

Barnett said restricting migrants could be disastrous for many sectors of the economy, driving up prices and creating even more labour shortages than we already suffer.

"It's horticulture, housing, construction. I know people struggling to get workers to do concrete formwork, roofing, plumbing, gib stopping and painting. Curbing immigration will make it much harder," Barnett said.

Auckland's real estate market had held up well - despite severe lending restrictions - because supply and demand remained relatively in balance yet he predicted that could now change.

"Banning foreign buyers won't affect the housing much because there weren't that many of them anyway. Some estimates were only 5 per cent. But banning immigration will affect house prices because 70,000 immigrants a year equalled 10,000 to 15,000 houses [sold to them] a year," he said, predicting this could tip some people into financial crisis.

Barnett emphasised these were his personal views and he was not speaking on behalf of the agency network.

"Say you've got a mortgage of 80 per cent on your house. Values drop, then people go into negative equity. This could particularly affect Auckland because that's where a lot of the immigrants stay and there will be a flow-on effect into other parts of the country," he said, citing potential price adjustments in the Bay of Plenty and Waikato.