New Zealand Prime Minister Jacinda Ardern. (Source: AP Photo) Related News
New Zealand Prime Minister Jacinda Ardern said on Monday she would like to finalise the details of a ban on foreigners buying established homes before a key trade deal meeting next week. The new Labour-led government wants to ban foreign buyers from purchasing existing homes in the country as it tackles what it says is a housing crisis left unresolved by the previous government. The ban is at odds with the Trans-Pacific Partnership, to which New Zealand belongs, and Ardern has said she would seek to renegotiate the deal to allow for the ban.
New Zealand has been a vigorous backer of the TPP since the United States withdrew in January. The 11 TPP members had set a goal of reaching broad agreement on the pact on the sidelines of the Asia-Pacific Economic Cooperation meeting in Vietnam next week.
“We’ve always said that we would undertake measures to make sure that people who were based overseas and had no interest in New Zealand were not able to buy existing homes and that hasn’t changed,” Ardern told local media, noting that the mechanism to enforce the ban would be the key issue.
“I am finalising some details around it. I am hoping to have it squared away before we travel to APEC.”
The ban is designed to overcome a politically sensitive housing crunch that has priced many New Zealanders out of the market, with prices up more than 50 percent nationally in the last decade. Foreign investors could still buy new houses and apartments, however.
The TPP requires member states to treat foreign investors no less favourably than nationals with respect to the establishment and operation of investments, according to Daniel Kalderimis, lawyer at Wellington-based firm Chapman Tripp.
This requirement is subject to exceptions negotiated by each state but New Zealand has no carve-out allowing it to restrict investors from other TPP states from investing in New Zealand housing on terms other than those that apply to nationals.
This has led the Labour-led government to seek to renegotiate the deal, which some fear may unravel an agreement which already suffered a blow this year with the U.S. withdrawal.
The New Zealand Herald newspaper said the new trade minister, David Parker, was now considering advice that an explicit ban could be acceptable under the TPP if it passed into domestic law before the deal came into force.
“We must find a solution to allow us to ban overseas buyers of existing New Zealand homes for us to proceed with TPP11,” the newspaper quoted Parker as saying. John Ballingall, deputy chief executive of the New Zealand Institute of Economic Research, said “even if we can technically make that change, I can’t imagine that that would be welcomed by the other TPP members as a sign of good faith and commitment to the agreement”.
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