Banning foreign home buyers was one of the major promises of Labour's election campaign, but the Government has now watered down its ban somewhat.

The Government will accept changes suggested by the majority of the Finance and Expenditure Committee in their report on the bill. Now, foreigners can buy apartments or in some case buildings off the plans and keep them. Initially, they were going to have to sell them once they were built.

The move means foreign developers can build residential properties of 20 dwellings and rent them out, meaning there will now be the possibility of foreign landlords. Up to 60 percent of units in new apartment developments of this size could be purchased by foreigners to keep and rent out, although the Government could set that limit lower by regulation, depending on market conditions.

Those buyers would still not be allowed to live in the units themselves, but could rent them out. Foreign buyers would still not be allowed to purchase existing standalone homes or hold on to new standalone homes on land they bought for development.

The Government has also announced that Singapore will join Australia as an exempted nation, with all of its citizens enjoying the same rights as Kiwis to buy property, in order not to disrupt a free trade agreement. 


New Zealand First leader Winston Peters says the move is a "smartening up of the foreign buyers legislation" - but National MP Gerry Brownlee says the Bill "now has so many carve-outs in it that some of its original purpose is almost lost".


Around March last year, 7.8 percent of homes in central Auckland were bought by foreign buyers. At the same time this year that had more than doubled to 18 percent. But overall in New Zealand, foreign ownership isn't rising - remaining steady at around just 3 percent.


Trade Minister David Parker says while key trading partners like China might try to copy Singapore and get an exemption for their citizens as well, they won't get one. And New Zealand is about to enter into a free-trade deal with the EU and the UK. It remains to be seen how that will be handled when it comes to residential ownership.