Efforts to curb Auckland's inflated housing market might have had the unintended effect of pushing the city's woes onto the rest of the country.
Houses bought and sold since October last year are subject to income tax if they're held for under two years, the family home excluded. Overseas buyers also need to set up a New Zealand bank account and IRD number.
Economist Shamubeel Eaqub says in the past six months, around 330 properties a month have been bought -- and registered -- by foreigners.
"That's about 5 percent of house sales across New Zealand, but probably more like 18 percent for Auckland -- quite a big number, but that's not been rising," he said on the Paul Henry programme this morning.
Auckland's housing market remains unaffordable for most, with the changes halting a half-decade of price increases but not bringing them down.
"The average house price is close to 10 times the family income. This is as expensive as it gets -- we're more expensive than London."
Investors are still the biggest drivers of demand, locking out first-home buyers, and in the hunt for even better returns have turned their eyes southward.
"These are the guys that can leverage the house price increases that we've had in recent years, and they're going into other places: Tauranga, Hamilton, Dunedin, Wellington," says Mr Eaqub.
"Those markets quite often have quite good returns, so rents are pretty good relevant to prices. The challenge now is, is it having the desired impact? Well, so much so that Auckland is not going gangbusters anymore but is still very unaffordable, but we're exporting our problems to the rest of the New Zealand. I'm not so sure that's going to be a good thing."
The problem is if centres outside Auckland become unaffordable for first-home buyers, the "ultimate Ponzi scheme" that is the New Zealand housing market won't end well.
"People are buying from each other who've already been in the market, and the number of people who are in the market is shrinking," says Dr Eaqub.
"The home ownership rate has been falling since 1991, so this is not new. But this whole thing is speeding up, facilitated by the banking sector -- a huge amount of money is pouring into mortgages not necessarily to build houses, but to buy houses from each other."
Increasing supply remains the only solution in the long run, he says, with the Reserve Bank's moves to reduce demand only a short-term fix.