Brown Peter: Questions for Oral Answer — Questions to Ministers 
Brown Peter: Questions for Oral Answer — Questions to Ministers 
[Volume:638;Page:8185] 
9.  
PETER BROWN (Deputy Leader—NZ First) 
 to the  
Minister of Finance 
: How does the total value of deals approved and the amount of land approved for sale by the Overseas Investment Office since the overseas investment legislation changed in 2005 compare with the total value of deals approved and amount of land approved for sale in the 18 months prior to the change in legislation? 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 The total value of deals has increased from approximately $4.7 billion to $7.2 billion. The net amount of land approved has increased from 58000 hectares to 300000 hectares. This apparently extremely large increase is almost entirely—99 percent—due to a single transaction the sale of Carter Holt Harvey’s forestry interests offshore. Those interests had until recently been owned offshore anyway before Graeme Hart bought them with clearly the intention of reselling them subsequently. 
Peter Brown 
: Does the Minister believe that the current legislation which places minimal restrictions on foreigners or non-residents buying residential property is contributing to the property price boom; if so why is the Government doing very little—or some might say nothing—about addressing this issue especially given that it claims that access to quality affordable housing is one of its policies? 
Hon Dr MICHAEL CULLEN 
: I know there are often articles about that usually in the  
Listener 
 but I do not agree that it is one of the major drivers of the increase in housing costs. The increase in house prices has occurred across almost the entire country often in areas of previously quite low housing value and still relatively poor housing areas. Even an area such as Ohai-Nightcaps has seen significant increases in property values. It is hard to believe that that is due to foreign owners coming in. 
Shane Jones 
: What reports has he seen from the real estate sector on the impact of the legislation? 
Hon Dr MICHAEL CULLEN 
: I have seen a report entitled  
Overseas Investment Guidelines Working 
 which quotes a real estate agent suggesting that the new legislation was “scaring off potential overseas buyers who did not meet its requirements”. Although we welcome applications that meet the requirements of the Act which are in fact quite strict I am glad to see that the legislation is fulfilling its purpose of acknowledging that it is a privilege for overseas persons to own or control sensitive New Zealand assets. 
Peter Brown 
: Does the Minister think it is fair that foreign property speculators earning higher incomes in stronger currencies face no restrictions on buying residential property whilst New Zealanders earning an average income are being priced out of the residential market; if he does not think that is fair will he tell us what he proposes to do to level the playing field and give New Zealanders—particularly young New Zealanders—a fairer go? 
Hon Dr MICHAEL CULLEN 
: The issue of course is that restrictions on urban land tend to be quite a lot fewer than those on rural land or sensitive land that abuts reserves etc. As I said I do not believe there is strong evidence that it is overseas buyers who are pushing up property prices in urban areas. That is due to a combination firstly of strong employment growth; secondly of income growth; and thirdly of population growth. These are the real factors that have been driving the growth in property values within New Zealand. The other point I would make is that the level of the dollar being quite high at this point means that for an offshore owner it is relatively expensive rather than cheap to buy a New Zealand property.