Concern about foreign buyers snapping up properties is purely an Auckland issue, says BNZ chief economist Tony Alexander, but it needs to be acted on now.
He says he regularly receives anecdotes about Chinese buyers purchasing at auctions, but only from the country's biggest city.
“Personally while I believe the anecdotes do not fully reflect the true situation, I am a strong supporter of restrictions on foreign purchases of New Zealand residential property.”
He said whatever the level of investment from China at the moment, it was likely to be four times as high in a decade - by which point any Government action would be tempered by political considerations.
“It would seem better to address the issue of rising concern about foreign buying now, before China becomes New Zealand’s biggest export destination in two to three years’ time.”
But Auckland Property Investors Association president David Whitburn said it seemed that a lot of the concern was just xenophobia
“Fifty per cent of an auction room might be of Asian origin but not all of them are Chinese and some of them might have grandparents born in New Zealand.”
He said the conversation about Chinese buyers was not constructive.
But he said loan-to-value restrictions being considered by the Government would benefit wealthy buyers – whether they were foreign investors or not.
“I would hate to see first-home buyers being priced out of the market.”