In the statement released on Tuesday morning (17 April), the IMF said that the measure is unlikely to be temporary or targeted, and that foreign buyers seem to have played a minor role in New Zealand’s residential real estate markets recently.

According to Bloomberg, proposed changes to the Overseas Investment Act, which the government says will bring New Zealand into line with neighbouring Australia, will classify residential land as “sensitive,” meaning non-residents or non-citizens can’t purchase existing dwellings without the consent of the Overseas Investment Office.

While non-resident foreigners will be allowed to invest in new construction, they will be forced to sell once the homes are built.

In-line with Australia

Alongside the proposed changes to the Overseas Investment Act, New Zealand’s new Labour-led government has pledged to fix the nation’s housing crisis with a raft of measures, including a ban on foreign speculators buying residential property, removal of tax distortions and an ambitious building program.

This follows a number of reforms announced by Australia in 2017, which included more difficult citizenship tests as well as the scrapping of the country’s popular temporary work visa systems.

The new requirements to gain citizenship into the country will now require candidates to be permanent residents for at least four years (as opposed to the previous one-year requirement).

In addition, applicants must be competent English speakers, must show a job record and prove they have integrated into the local community.

At the same time Australia reduced the amount of jobs which would be eligible for a temporary visa by over 200 occupations.

According to ABC, Australia accepts up to 190,000 permanent migrants each year — most of them skilled — but former prime minister Tony Abbott wants that number halved to help lower the cost of living and reduce pressure on infrastructure.

This is in contrast to a report by Australia’s Department of Home affairs which found cutting immigration would have far-reaching consequences for the economy, including “significantly lowering GDP and GDP per person than would otherwise be the case “.