Land sales to foreign buyers at 7-year high

By Adam Bennett

5:30 AM Saturday Jan 4, 2014
Poll shows concern as MPs prepare to debate Labour bill strengthening the rules 

Canadian film director James Cameron and his wife Suzy Amis own more than 1500ha of property in the Wairarapa. Photo / AP

Canadian film director James Cameron and his wife Suzy Amis own more than 1500ha of property in the Wairarapa. Photo / AP

Sales of land to overseas investors have hit a seven-year high, just as a Herald-DigiPoll survey shows the issue remains a worry for a majority of New Zealanders.

Overseas Investment Office figures show a net 73,143ha – an area larger than Lake Taupo – had been sold to foreign investors by October. Even with sales for the final two months of 2013 yet to be counted, that is the highest annual tally since Carter Holt Harvey sold 176,902ha of forests to United States company Hancock in 2006, which pushed the total that year to 198,346ha.

Lake Taupo occupies about 62,000ha.

A member’s bill from Labour MP and former Foreign Minister Phil Goff to limit rural land sales to foreigners was recently drawn from Parliament’s ballot and will be debated early this year. In a December Herald-DigiPoll survey, 54.5 per cent of 750 New Zealanders agreed the bill was “sound and should be supported”.

That follows fears overseas buyers have been inflating residential property prices, particularly in Auckland.

The bill is an updated version of one David Shearer put forward early in his term as Labour leader amid public anxiety sparked by the sale of the Crafar dairy farming empire to Chinese company Shanghai Pengxin. The purchase was dogged by ultimately unsuccessful court action to prevent it on the grounds it did not meet economic benefit tests under the Overseas Investment Act.

Just over a third of those polled last month said Mr Goff’s bill was pandering to people’s prejudices and should be opposed.

Mr Goff acknowledged that much of the opposition to the Shanghai Pengxin purchase appeared to be because the company was Chinese.

“That’s not what my bill is about at all. My bill will apply as much to Americans and Brits as it will Chinese or any other investors.

“If there are significant net benefits in terms of jobs and growth and exports and it helps New Zealand, then of course we’d entertain an application to purchase the land. It’s not an absolute prohibition. It simply says the onus then rests on the purchaser to show that it meets the criteria that are set out clearly in the bill.”

Mr Goff’s bill narrows the discretion ministers have to approve sales by setting out specific criteria they must follow. They include the test that the purchase must result in greater economic benefits such as new jobs and exports than the same investment by a New Zealander would bring.

Finance Minister Bill English has said the bill does not do anything not provided for in his 2010 changes to overseas investment rules. He said that while the poll result confirmed that New Zealanders expected rural land sales to foreign investors to deliver benefits to New Zealand, “this is already captured in existing legislation and the test of the benefit was confirmed by the Crafar Farms court case”.

Duty Minister Chris Finlayson defends the existing legislation as adequately protecting New Zealand’s economic interests, and he derided Mr Goff’s bill yesterday as “more shameless backbench opportunism”.

“The Overseas Investment Act already requires that foreign investors in strategically important land demonstrate substantial economic benefits for the country,” he said through a spokesman.

But Mr Goff said National’s changes had not changed the scale of rural land sales to foreign interests.

Net annual land sales to foreigners averaged 17,742ha before the changes, and 58,238ha afterwards.

He pointed to the purpose clause of his bill which says it is “to substantially limit the sale of rural land to overseas interests”.

“The minister must now be convinced and be able to demonstrate there is a net clear benefit and the minister is directed under the purpose clause to actually limit land sales.

“It gives New Zealanders greater confidence that the act is doing what the National Government pretended they wanted to do when they saw the writing on the wall in terms of public opinion in New Zealand.”

Spokesman for lobby group Save Our Farms Tony Bouchier said the DigiPoll survey reflected what his group already knew, “that a huge number of New Zealanders are concerned about the sale of our agricultural land to overseas investors”.

Mr English’s comment that the bill effectively preserved the status quo was untrue, he said.

Mr Bouchier added that the strength of support for Mr Goff’s bill in the poll suggested at least some National supporters backed it.

The New Zealand Herald

Surge in rich gaining New Zealand residency

James Cameron

LAND OF PLENTY: An aerial view of Hollywood director James Cameron’s property in the Wairarapa.

James Cameron

Director James Cameron.

Kim Dotcom

Getty Images
Mega founder Kim Dotcom.

Mega-rich people are flocking to New Zealand after immigration rules were relaxed for people with at least $10 million to spend.

The change in 2009 has led to a surge in seriously wealthy people gaining New Zealand residency and most don’t need any business experience or English language expertise.

More than 100 people have been approved under the “investment plus” category, open exclusively to those investing $10 million in New Zealand, and dozens more are applying every year.

Immigration New Zealand has even started headhunting multi-millionaires they have heard could be inclined to relocate here along with a sizeable investment.

Successful applicants have included Internet entrepreneur Kim Dotcom and Hollywood director James Cameron.

The more modestly wealthy – those with $1.5 million to spend – are also applying in their hundreds through another category for smaller investors.

But their smaller investment means they face more rigorous scrutiny, including proving they can speak English and have at least three years’ business experience.

Immigration lawyer Simon Laurent said it was unclear what New Zealand was getting from lowering the bar for the super rich.

While they may need to invest money to get into New Zealand, after three years the new Kiwi residents did not have to keep it here.

“If these people get residency and after three years funnel off the money, we might get stuff all out of it,” he said.

“There is a lot of cynicism about the benefits to New Zealand.”

David Cooper, director of immigration consultancy Malcolm Pacific, said he had helped about a dozen people apply for the $10m residency package, including Kim Dotcom.

Most of them were from the United States or United Kingdom and often spent far more than $10 million.

The number of mega-rich moving to New Zealand had previously been a trickle but had steadily increased since the change, he said.

“From an economic point of view, we want these people to come here to contribute.”

He defended the looser rules around language and experience for people able to invest more.

“If you are that wealthy, English will not be barrier.”

Matt Hoskin, migrant attraction manager at Immigration New Zealand, said the mega-rich were already being approached by the New Zealand Government with offers of residency for investment.

Under the scheme, more than $770 million had been invested by new New Zealand residents, with another $480m approved but still awaiting confirmation.

Most people kept their money in New Zealand after the three years required to gain residency and often went on to spend more.

Americans were the biggest investors, followed by the Chinese, he said.

Most had visited before and had developed a fondness for New Zealand.


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