- Foreign investment in residential property is a contentious issue, especially in popular markets with Chinese buyers such as Australia, Canada and New Zealand where prices have risen sharply.
- Chinese property website Juwai.com has created a nifty map showing all the current and proposed restrictions on foreign residential investment.
- Outside of New Zealand, the group believes few new restrictions will be introduced over the next year.
Foreign investment in residential property has become a contentious issue in recent years, particularly in those markets that have seen extreme gains in home prices.
While the debate over whether increased foreign investment has contributed to substantial price gains, many national and regional governments have already tightened, or are looking to implement, restrictions on foreign property buyers.
This map shows just some of the current or possible restrictions that are currently in place around the world.
It comes courtesy of Juwai.com, a leading Chinese international property website, and shows the restrictions in many of the markets popular with Chinese buyers.
After the introduction of restrictions by many regional state and national governments in recent years, the group expects few additional measures to be introduced in the upcoming fiscal year, signalling New Zealand out as the only popular market where new restrictions are likely.
“New Zealand is the sole major investment destination in the world that we consider to be very likely to impose new foreign buyer restrictions this year,” the group says.
“The Overseas Investment Amendment Bill, with its recent amendments, would have the advantage of finally putting to an end the political uncertainty that has been ongoing since before the last election.”
The bill aims to ensure that overseas persons “who are not resident in New Zealand will generally not be able to buy existing houses or other pieces of residential land”, according to the New Zealand goverment.
With property prices in many other popular destinations for Chinese investors now starting to cool, Juwai expects few, if any, additional restrictions to be announced in the year ahead.
Given Chinese investors account for a large share of total overseas residential property investment, whether that outlook changes will likely be determined by any potential changes to outbound capital controls in China, something that has contributed to a sharp pullback in Chinese overseas investment in the past few years.
“Beijing has already telegraphed that it may experiment with further loosening capital controls,” says Carrie Law, CEO and director of Juwai.com.
“China has already resumed two key outbound schemes for investment in overseas securities, which had been suspended to reduce capital outflows.
“These have no direct impact on foreign property buyers, but do reveal a change of direction — from tightening to loosening.”