New Zealand's housing market is experiencing a surge in the price of residential property, and the government has just passed the Overseas Investment Amendment Bill which essentially bans foreigners from purchasing homes.
Foreigners with Kiwi residency and existing foreign owners aren't affected by the ban.
House prices have nearly doubled over the past decade, according to central bank data, and are up more than 5% so far this year. By thinning the pool of potential buyers, lawmakers hope to ease the property shortage that has been blamed for the country's bind. "And one of the safest havens you could think of is real estate or land in British Columbia and we need to take steps to curb this", he says, adding he's hoping to see the kind of action that New Zealand has specifically taken.
"This government believes that New Zealanders should not be outbid by wealthier foreign buyers", said Parker, who shepherded the legislation through parliament. Home ownership rates among New Zealanders have also been falling in recent years. In a 2017 report the Real Estate Institute of New Zealand, or REINZ, said prices there had leaped almost 70 percent in just five years.
Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crunch that has seen average prices in the largest city, Auckland, nearly double in the past decade and rise more than 60 percent nationwide.
The country has the highest rate of homelessness among member states of the Organisation for Economic Cooperation and Development (OECD), a study by Yale University revealed previous year.
Yet, while the problem is widely agreed upon, the solution passed Wednesday has proved far more divisive. And while residents of China constituted the largest group of known overseas buyers, the next largest group hailed from Australia - which is exempt from the ban anyway.
However, the data did not capture property bought through trusts and also showed property transfers involving foreigners was highly concentrated in certain areas, such as downtown Auckland and the southern scenic hot spot of Queenstown.
Nevertheless, the New Zealand government numbers have raised doubts about whether the ban will have any noticeable effect at all. "But if the foreign buyer ban creates a greater downdraft in prices, then the game could change".
And it was for this reason that the International Monetary Fund urged the country last month to reconsider its course, as well.
But Wednesday's bill drew the ire of opposition National Party politician Judith Collins, who described it as a cynical attempt to "blame foreigners" for the country's housing issues.
He says instead of viewing this as an opportunity to generate revenue via taxes, the province needs to go after the source and make it illegal to purchase homes unless you live and pay taxes in B.C. He also calls the speculation tax a "dog's breakfast" in the sense of how hard it is to enforce.
The government relaxed the proposed ban a little in June to allow non-residents to own up to 60 percent of units in large, newly built apartment buildings, but they will no longer be able to buy existing homes.