Twyford Phil: Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill — First ReadingText is incorporated into the Bound VolumeTwyford Phil: Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill — First Reading[Sitting date: 25 May 2016. Volume:714;Page:11313. Text is incorporated into the Bound Volume.]PHIL TWYFORD (Labour—Te Atatū): I move That the Overseas Investment (Protection of New Zealand Homebuyers) Amendment Bill be now read a first time. I nominate the Government Administration Committee to consider the bill. I want to start by addressing the problem that this bill is designed to fix. I want to draw the House’s attention to a story that has been running on the New Zealand Herald website today about a house flip in the Auckland suburb of Beach Haven in which the house jumped $180000 in price in just 2 months. The Barfoot and Thompson agent who sold the house said that it went over the phone to a buyer last Thursday. “The house is empty.” he has told the New Zealand Herald “It was telephone bidding. There’s been nothing done to it between the sales. Similar things happen all the time.” A neighbour I think who spoke to the New Zealand Herald said: “Auckland has become speculator’s paradise…[when] a Beach Haven house sells for $180000 more in just 2.5 months.”This bill amends the Overseas Investment Act 2005. It applies new restrictions on non-resident purchasers of New Zealand’s residential property in order to protect New Zealand homebuyers. We have seen in this country a housing crisis the results of which have been all over the TV screens the radio and the newspapers now for several years but it seems to have particularly worked itself up into a crescendo over the last few days and weeks. At the heart of that problem are a number of drivers that have seen Auckland house prices become amongst the most unaffordable in the world relative to incomes. Labour believes that out-of-control property speculation is one of those key drivers.Under the provisions of this bill non-residents will be granted permission to purchase a residential property only if they intend to live here permanently or their purchase adds to the existing stock of housing. So for example a non-resident wishing to purchase vacant land with a commitment to begin building a dwelling within 12 months is likely to have their application granted. Students skilled migrants and other persons who are temporarily resident in New Zealand will be granted approval to purchase a house on the condition that it is sold if they subsequently leave the country. Any non-resident person found to have purchased a residential property without the approval of the Overseas Investment Office could be forced to sell the property which may cause them a loss and they may have to wear a fine.This has been one of the most intensely debated and discussed issues in relation to New Zealand’s housing crisis. This bill reflects the Labour Party’s policy to ban non-resident foreigners from buying existing homes and to say to them: “If you are a non-resident foreigner you live on the other side of the world and you want to buy a house in New Zealand build a new one.” That is the Australian policy and it has been working successfully there because in the last 12 months it has channelled nearly $30 billion of foreign direct investment into the building of new homes. This policy is supported by an overwhelming majority of New Zealanders. The last 3 News/Reid Research poll on this found that 61 percent of New Zealanders supported this policy including a majority of National Party voters. In that poll of 1000 people 54 percent of National Party voters said that they supported the ban that is Labour’s policy.It is common knowledge—everybody knows in Auckland—that non-resident foreign speculators are bidding up the price of housing just as it was reported in the New Zealand Herald today that a phone bidder from offshore snapped up that house at $180000 more than it was sold for only 2 months before. Some very disturbing data came out recently that showed that speculators—foreign and domestic—are hoovering up the more affordable suburbs in Auckland. In the last 12 months 80 percent of property transactions in the south Auckland suburb of Ōtara were made by investors or speculators depending on which way you want to describe them. And it should be no surprise to this House that it is the suburb of Ōtara which has that very high level of speculator activity that has the most rapidly falling level of homeownership—more than four times the national average. That is the reality in John Key’s New Zealand today. That is the consequence of the housing crisis that this National Government has allowed to spiral out of control. Right across Auckland now particularly in the more affordable suburbs in south and west Auckland entire streets of homes are owned by absentee foreign landlords who are never seen in that neighbourhood—they are never seen. This is destroying communities and neighbourhoods right across our country’s largest city.John Key has painted himself into a corner on this policy. The proof of this was seen recently when we saw the National Government selectively and manipulatively releasing data that had been gathered over the last 6 months by Land Information New Zealand. Poor old Louise Upston was left with the job of having to release this shonky data and the Government tried to claim that the data showed foreign buyers amounted to only 3 percent of the buyers in the market.Hon Steven Joyce: That’s correct. That’s correct Mr Twyford.PHIL TWYFORD: If Steven Joyce’s maths is so bad that he is willing to interject in this House to say that that data suggested it is only 3 percent then economic development in this country is in very very bad hands. Even the most cursory analysis of that Land Information data showed that up to 48 percent—48 percent—of the transactions could have been offshore buyers—[Interruption]The ASSISTANT SPEAKER (Hon Trevor Mallard): Order! I am going to ask the member to sit and I am going to ask Dr Coleman to stand withdraw and apologise.Hon Dr Jonathan Coleman: I withdraw and apologise.PHIL TWYFORD: —because 45 percent of the transactions in that Land Information data had been excluded from the final calculation of the presence of foreign buyers. Forty-five percent of the transactions were excluded including trusts businesses companies people on student visas and people on temporary work visas. The data was shot through with holes. It has no credibility at all. The only thing that data shows is that this Government was so desperate to try to support a political point that foreign buyers do not have significant presence in the Auckland market and that it was prepared to embarrass itself by releasing such selective and manipulative data in such a cynical and dishonest way. One of the things that—The ASSISTANT SPEAKER (Hon Trevor Mallard): Now now. The member will stand and withdraw. He cannot accuse Ministers of being dishonest.PHIL TWYFORD: I stand withdraw and apologise.The ASSISTANT SPEAKER (Hon Trevor Mallard): And apologise—thank you.PHIL TWYFORD: I meant to say that the release of the data was cynical. I certainly did not mean to say it was dishonest.The thing that really upsets people in Auckland is that there are an estimated 15000 ghost houses in Auckland that are sitting empty. The census data identified 22000. When you do the calculations and remove the ones that are in between tenancies or in the process of being sold there are approximately 15000 properties deliberately left empty by their absentee landlords who are happy to make 25 percent a year of capital gains as they did last year and cannot be bothered renting the house out to tenants. This is one of the symbols of the National Government’s housing crisis. It has got to change it has got to stop and Labour says that there is no benefit to New Zealand or New Zealanders in allowing non-resident foreigners to sit on the other side of the world and bid up the price of housing disenfranchising young Kiwi first-home buyers in the process.It was the Prime Minister who said he did not want New Zealanders to be tenants in their own land. Well that is exactly what is happening because homeownership rates are falling so rapidly—so rapidly. In Auckland a majority of people are renters. A majority are renters. We have the lowest homeownership rates in 64 years thanks to the negligent housing policies of this National Government.I want to point out that a number of commentators—BNZ Chief Economist Tony Alexander said that there is merit in this bill noting that we are becoming one of the few residential markets left around the world that is completely open to foreign buyers. The New Zealand economist and investment broker Rodney Jones based in Beijing has supported action like this bill by saying: “Look the foreign buyers go to New Zealand or Australia or Canada. They can buy freehold property that’s theirs for ever. That’s a very powerful allure and that’s not going to go away.”This is not a silver bullet but it will make a major contribution to fixing the housing crisis.