Video: Smith says 'diddly-squat' evidence of foreign buyer risk

  • 09/06/2016
Nick Smith (File)
Nick Smith (File)

Housing Minister Nick Smith has passionately refuted suggestions Westpac's decision to bar foreign buyers from getting home loans is a signal that non-resident buyers present too much of a risk.

Responding to a question from Newshub's political editor Patrick Gower, Mr Smith said despite both Westpac and ANZ tightening up their lending criteria, there was no evidence that was the case.

"I don't think [Westpac's decision] is particularly extraordinary. I know there are other building societies in New Zealand that have had that policy for some time and they're entitled to have it," he said.

"The fundamental issue for Government is what is the evidence from the Reserve Bank, what is the evidence from Treasury, what is the evidence from my own ministry, what is the evidence from LINZ about overseas buyers on the New Zealand housing market."

"The answer is diddly-squat -- and for that reason it does not cause me concern."

That's despite Mr Smith being told of Westpac's ban on foreign buyers. Westpac will no longer lend to non-resident buyers with overseas income, because the tightening of policy reduces risk.

And ANZ also moved to stop foreign investors, saying: "facilities are restricted to owner-occupied properties."

The 'bank ban' came as the Reserve Bank Governor Graham Wheeler warned that 46 percent of Auckland buyers are rental property investors. 40 percent of buyers in the rest of New Zealand are also investors, whereas in comparison, investors make up just 10 percent of Canada's market.

Watch the video.

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