New data show Chinese buyers scapegoated for New Zealand's surging house prices

WELLINGTON/BEIJING -- Fears that New Zealand is being sold off to foreign buyers, mainly from China, are a myth, according to a recently released official figure.

Data collected by Land Information New Zealand (LINZ) showed that less than 1 percent homes in the country were sold to offshore Chinese buyers in the first three months of 2016.

It is the first ever official figures on overseas buyers of New Zealand homes.

Right after the figure was released in mid-May, National Party list MP Jian Yang demanded apologies from the opposition Labor Party, which sparked a political storm last year with claims that Chinese property investors are fuelling the housing bubble in Auckland.

Yang, the former director of the China Studies Center at the New Zealand Asia Institute, said the Labor Party had "turned offshore Chinese property buyers into scapegoat" for the country's soaring house prices.

"Among the 3 percent offshore property investors, less than 30 percent are from China. That is to say, the Chinese buyers account for only less than 1 percent of all the property buyers in New Zealand," Yang said.

The figures from LINZ showed that only 3 percent of the home sales in the first three months of this year involved buyers who were overseas tax residents.

These buyers were involved in 1,158 transfers, and included 321 of the Chinese mainland tax residency, 312 of Australia, 162 of mixed tax residency, including at least one of the buyers with New Zealand tax residency, 99 of the United Kingdom, 51 of the United States, 36 of Singapore and 33 of Hong Kong.

LINZ chief executive Peter Mersi stressed it was not a register of foreign ownership "because tax residency is not the same as nationality." "For example, a New Zealander living and paying tax in the UK who bought a house in New Zealand would be included in this information as having overseas tax residency," Mersi said in a statement.

Land Information Minister Louise Upston said that the figures showed that overseas tax residents were behind a relatively small proportion of property transfers.

Labor's housing spokesman Phil Twyford said last July that people with Chinese names bought nearly 40 percent of houses from February to April in 2015, calling for a total ban on foreign buyers purchasing New Zealand homes.

Twyford said the data were from "one of Auckland's leading real estate agencies," which he refused to nam

Labour's estimate, which is however based on people with Chinese-sounding surnames and did not differentiate between non-residents and residents, was questioned by many economists, who said a lack of legitimate data about foreign property buyers had led to "half-baked" information verging on racism in the Auckland housing market.

The New Zealand Institute of Economic Research (NZIER)'s principal economist Shamubeel Eaqub said that the data was problematic, adding New Zealand was "in the darkness" when it came to legitimate and real data on foreign buyers.

Housing Minister Nick Smith also pointed out that Labour's data was not reliable, as it was from one real estate agency and made guesses at who was a New Zealander and who was not, adding that Labour was playing the "oldest political trick in the book" by picking on one ethnic group.

The housing issue was about supply, which was why the government's focus was on getting more houses built, according to Smith.

"The government will not be making housing policy based on people's surnames," Smith added.