Curbs on foreign house buyers are predicted within two to three years by BNZ chief economist Tony Alexander.  

Alexander says this country should "as soon as possible" adopt Australia’s rules restricting foreign buying of anything other than new housing unless resident for 12 months.

Australia limits what foreign investors can buy in residential real estate, restricting them to newly built houses and apartments.

"When might we see the adoption of some form of restriction on foreign home buying in New Zealand? Maybe within two or three years," he says. Alexander has been recommending that New Zealand adopt the Australian regime for about three years. He has also been one of the few people to attempt - through a survey of real estate agents he used to conduct - to quantify the extent of offshore buying of NZ houses.

The Government has so far not collected meaningful data on overseas buyers, though new measures requiring provision of IRD numbers will provide more information.

Alexander said he had recommended adoption of the Australian regime, "not because I feel Chinese buying is currently the big buying force people believe it is, but because the buying will grow and the eventual popular backlash against such buying and introduction of legislation in that heated environment would risk a backlash.  Trade retaliation would be likely."

He explained that Chinese authorities have yet to relax hefty restrictions on people getting their funds offshore, and when they do there will be a new forced unleashed on global property markets.  Chinese investors are wary of investing within China, but are also limited to how much money they can take out of China each year.

Alexander went on to say that were we to adopt the Australian regime, we would need to add in an extra clause along the lines of apartments having to be made available for rent, or actually rented.  This would prevent the properties sitting empty, which is not uncommon with foreign owners who do not buy the property to rent it out.

He reiterated that the "fundamental cause" of rising prices in Auckland was a shortage of supply "and until that gets addressed prices will stay highly elevated and perhaps keep rising out to late-2017 this cycle".