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Political Roundup: The Coalition's very clever ban on foreign house sales
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11939479
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What will the foreign buyer ban achieve?
Obviously the intention of the ban is to reduce competition for buying houses, therefore limiting price increases. But will this really work?
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Referring to the fact that foreigners will still be allowed to buy new houses, Compton says that the only impact of the new rules will be to shift "the two or three per cent of property investment that comes from overseas from existing homes to new builds instead. The small resulting increase in prices there pushes citizens and residents back into the existing home market, and thus increases competition there by the same amount. The overall result? You're no better off than you were before, unless you're a property developer."
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The foreign buyer ban is politically powerful
The coalition government has stepped back from suggesting that the change will make any huge difference to housing affordability. Instead, David Parker is emphasising that the ban is an "important point of principle" - see Laura Walters'
How much of a difference will the foreign house buyers ban make?
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