New Zealand to ban foreigners from buying existing houses
The real reason this is happening is in fact much simpler than outlined in the comments: Kiwis quite simply don't have an asset class in which to invest sensibly that isn't property [1]. In America, I'd cheerfully put the majority of my income into an index fund tracking things like the S&P 500 but New Zealand tax laws heavily penalise this and incentivise property ownership by giving a pass on capital gain tax. The result? House prices are driven up artificially; a problem adroitly obscured by not appearing on an RPI index.<p>The current political developments present an interesting situation; a Labour campaign pledge was to impose capital gain tax on personal property investment (already sanely capped for anyone considered a property developer). I don't see other asset classes being taxed differently to compensate, thus exacerbating the already dire talent drain the country is experiencing. Ironic, given the endemic NZ aspiration to 'get ahead'. It's certainly an interesting time to live here, but I'd prefer bubbles to confine themselves to the Bay Area!<p>[1] <a href="https://www.fsc.org.nz/site/fsc/files/Releases/Releases%202014/FSC-Taxation%20and%20Savings%20Paper-Final.pdf" rel="nofollow">https://www.fsc.org.nz/site/fsc/files/Releases/Releases%2020...</a>