Labour plans to restrict purchases of existing homes to New Zealadners and Australians.
Steven Joyce asks a couple of pertinent questions about it:
Prime Minister John Key said there was a limited number of overseas-based foreign home buyers.
“So the reality is that not that many people come in and buy properties that aren’t either permanent residents or aren’t going to take up personal residencies.”
There were also ways to “get around that system”, he said.
It was unlikely to be the determining factor in the shortfall in the housing sector, he said.
“The number of people who live overseas who are not going to be permanent residents, who are not going to be citizens…I would have thought is pretty small.”
Housing Minister Nick Smith said it was a sign of how desperate Labour and Mr Shearer had become.
“The oldest trick in the political book, whether it be over crime or unemployment or affordable housing, is always to blame the foreigners.
“There’s no evidence that overseas buyers are having any discernible affect over house prices.”
It was an “unprincipled” policy because it exempted Australia, Dr Smith said.
“They are the largest group of non-resident home buyers.”
One of the biggest faults of the policy is that there are easy ways to circumvent it:
Property commentator Olly Newland said the policy would not work.
Australians would be exempted from the scheme, because of a reciprocal arrangement where New Zealanders were able to buy properties there.
Mr Newland said that made the policy “a bit of a nonsense” because Australians bought the highest number of properties here of all foreign buyers.
“Secondly, of course, any overseas buyer would very quickly find somebody else to buy a house for them here in their name and hold it in trust for them.
“There are a thousand ways to get around it if they want to come here,” he said.
“It sounds good but in practice it just won’t work.”
Like a lot of Labour’s policies it might have superficial appeal but it won’t work.