WELLINGTON (Reuters) – The International Monetary Fund called on New Zealand to reconsider a controversial plan to ban foreigners from buying residential property, warning the move could discourage foreign direct investment necessary to build new homes.
The Labour-led coalition government won September’s election with a pledge to clamp down on soaring housing prices and reduce high rates of homelessness, partly by banning foreign buyers.
Foreign - Ownership - Criticism - Years - New
Foreign ownership has attracted criticism in recent years as New Zealand grapples with a housing crisis that has seen average prices in the main city of Auckland almost double in the past decade and rise more than 60 percent nationwide.
In its annual assessment of member countries’ economies, the IMF said on Wednesday New Zealand’s ban was unlikely to help much in making housing more affordable.
Ban - Home - Ownership - Investment - Houses
“This ban on foreign home ownership could discourage potential foreign direct investment that could help build more houses,” the IMF said in a staff report.
Other policies, such as tax incentives and the government’s “Kiwibuild” programme to build new affordable homes, would be enough to address a shortage of housing, it said.
Directors - IMF - Executive - Board - Authorities
Many directors of the IMF’s executive board “encouraged the authorities to reconsider” the ban in a meeting to finalise the consultations, a summary of IMF discussions showed on Wednesday.
“They considered that (the planned ban) would be unlikely to improve housing affordability, while the broad housing policy agenda,...
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