NZ furore over Chinese property buyers

Opposition party blames them for rise in real estate prices, but denies claims of racism

WELLINGTON• • New Zealand's main opposition Labour Party has denied allegations of racism after blaming Chinese investors for pushing up prices in Auckland's red-hot property market.

Echoing Australian concerns about Asian buyers' impact on the Sydney and Melbourne property markets, New Zealand Labour released data over the weekend purporting to show that 40 per cent of buyers in Auckland were Chinese.

There is criticism that the data was "half-baked" - because it was based on whether the buyers' surnames appeared to be Chinese.

Housing Minister Nick Smith accused Labour of "playing the race card", a charge rejected by the party's housing spokesman, Mr Phil Twyford, who said he was just aiming to promote debate on an important issue, not single out Chinese people.

"If they have perceived this as a criticism of them, it isn't. Our only concern is about offshore Chinese speculators," he told the New Zealand Herald.


Dumbing down complex economic woes and blaming them on an ethnic community whose members are already feeling under pressure is neither new nor unique, but it's always disappointing.


Labour leader Andrew Little said raising the issue of foreign ownership was difficult but needed to be done. "(It's) always going to be a tricky subject to raise, but the data we had told a pretty clear story," he told commercial radio.

Mr Little said a register of foreign property owners was needed to give New Zealanders an accurate picture of who was buying into the housing market.

"They're sick and tired of losing homes at auction to higher bidders down the end of a telephone line in another country," he said.

House prices in North Island's Auckland soared 26 per cent to an average NZ$755,000 (S$690,000) in the year to June, while prices outside the city were steady and averaged just NZ$340,000.

The Reserve Bank moved to cool the market in May, warning that a property bubble posed a significant risk to the entire economy, but demand remains strong.

Race Relations Commissioner Susan Devoy said it was simplistic to claim ethnic Chinese were behind the city's price rises. "Dumbing down complex economic woes and blaming them on an ethnic community whose members are already feeling under pressure is neither new nor unique, but it's always disappointing," she said.

"Chinese New Zealanders deserve better than this and so does anyone keen on actually solving this issue."

Auckland has a population of 1.5 million, about a third of the country's total, and official data shows it is where more than half of migrants to New Zealand settle.

Across the Tasman, home prices in Sydney have jumped 43 per cent since May 2012, while across Australia, values have risen just 27 per cent, according to property monitor CoreLogic.

Chinese buyers are being targeted by critics for driving up prices in Sydney and Melbourne, attracting government attention after claims that some buyers are using proxies or complex front companies to get around curbs on foreign purchases of existing residences.

Australia's foreign investment rules ban most foreign purchases of established homes, and heavy penalties are being introduced for illegal purchase of new homes.

Australia's most senior economic bureaucrat last month said Sydney, in New South Wales, is in the midst of a price bubble.


A version of this article appeared in the print edition of The Straits Times on July 16, 2015, with the headline 'NZ furore over Chinese property buyers'. Print Edition | Subscribe