Winston Peters says the policy was introduced in the context of "rampant" house-flipping. Photo: RNZ / Samuel Rillstone
NZ First leader Winston Peters insists his party's supporters are "rational and reasonable" people and will understand the move to let some wealthy overseas investors buy property here.
The coalition's new position - described by Prime Minister Christopher Luxon as a "happy compromise" on Monday - would allow those on a so-called "golden visa" to buy or build one house in New Zealand as long as it was worth more than $5 million.
NZ First helped introduce the foreign buyer ban as part of its coalition with Labour in 2018 and has long advocated against "deep-pocketed foreigners" distorting the housing market.
Peters told Morning Report the announcement was a "very, very, very minor" tweak to help incentivise investment in the economy.
"We just couldn't get this country to be attractive enough, and we had to do something about that."
Peters conceded that the ban - which he helped introduced - had contributed to that unattractiveness: "You could say it that way, yes".
But he said the policy was introduced in the context of "rampant" house-flipping and "serious duplicity and cheating" by some foreigners who had been "using this country as a bolt-hole".
"That's why the total ban happened, and this very, very, very minor adjustment will attend to the benefits of the investor."
Peters was confident his supporters would be on board with the development as the new overseas buyers would not be in competition with them for houses.
They would also be limited to just one house, he said, minimising any impact on prices for locals.
"We're talking about the very, very top end of the market," Peters told Morning Report.
"The greater problem we've got for home access is at the lower and middle end of the market."
Only about 10,000 houses in New Zealand are currently thought to be worth more than $5m, about one percent of the country's housing stock.
National campaigned in 2023 on letting foreigners buy homes worth more than $2m subject to a 15 percent tax, but was forced to abandon that plan during coalition negotiations with NZ First.
The two parties had since been locked in negotiations over the policy.
Asked why the discussions had taken so long, Peters said: "We held out to a position of five million [dollars], and it's finally been agreed to."
Peters said National's initial proposition was "a failure" and did not add up, but began to make more sense with the higher $5m price point and a requirement for significant investment.
On Monday, Luxon said Peters had been "very mature, very constructive" in their conversations.
Luxon said both sides wanted to attract investment to New Zealand without causing "lots of frothiness" in the property market.
"Winston and myself had different positions at the starting point, but we're both very, very aligned on what we're trying to achieve here, which is productive investment. And so I think we've got to a really good place."
David Seymour and Winston Peters. Photo: RNZ
Speaking on First Up, ACT leader David Seymour said his party had long opposed the foreign buyer ban altogether, but had signed up to a coalition agreement requiring compromise from all involved.
"We entered into an agreement with two other parties," Seymour said. "One of them wanted to make it $2m, the other one wanted to make it $5m, we would make it zero."
Labour leader Chris Hipkins told Morning Report the government's priorities were all wrong.
"Christopher Luxon is rolling out the welcome mat for wealthy foreigners, while New Zealand families are struggling with the cost of living and struggling to buy their first home."
Hipkins said Labour would investigate whether it could repeal the change if elected but warned that may not be possible due the country's trade agreements.
The government's Active Investor Plus or "golden visa" programme includes two pathways to residency, requiring either a minimum investment of $5m over three years in higher-risk ventures, or $10m over five years at a lower-risk threshold.
Latest Immigration New Zealand data shows there have been 308 golden visa applications, covering 1000 people, representing a potential minimum investment of $1.9b.
Almost 40 percent of applicants are from the United States.
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