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World New Zealand moves to ban foreign investors from buying homes

New Zealand's Prime Minister Jacinda Ardern speaks in front of the parliament on Oct. 26, 2017, in Wellington, New Zealand.

Nick Perry/AP

New Zealand's new government is moving quickly to fulfill a campaign promise by banning foreign investors from buying homes.

Prime Minister Jacinda Ardern announced Tuesday that she expects to introduce new laws within weeks that would take effect early next year. She said the government is determined to make it easier for New Zealanders to buy homes and to stop foreigners from driving up prices.

"We stand strongly in favour of the view that housing is a right," Ardern said.

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Read also: B.C. reluctant to impose ban on foreign home buyers

Ardern, who leads the liberal Labour Party, was sworn in as prime minister last week following nine years of conservative rule.

She said the ban would not affect most existing free-trade agreements and would be enacted before the proposed Trans-Pacific Partnership, a free-trade deal that 11 nations, including Japan and Australia, are considering signing.

It is unclear whether the New Zealand government will still sign up for that proposed deal. Ardern said it's trying to renegotiate arbitration clauses that would allow investors to sue governments.

"We are going in with the explicit intent of trying to remove New Zealand from these clauses," she said. "But I will acknowledge it's very difficult at this late stage to achieve that outcome."

She wouldn't say whether the clauses were enough to make New Zealand walk away from the deal, saying she wanted to maintain a bargaining position.

Under the proposed housing legislation, Australians and foreigners who are New Zealand citizens or residents would be exempt. Foreigners could also continue to buy residential land to build new homes.

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The opposition National Party said the so-called ban raised more questions than it answered.

"This is a policy that's designed to solve a political problem," said Steven Joyce, the National Party's finance spokesman. "Evidence in both Australia and here in New Zealand is that overseas buyers don't have a significant impact on the housing market."

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