1. Rt Hon WINSTON PETERS (Leader—NZ First) Link to this
to the Minister of Finance
What was the total net area of land sold to overseas investors in the 21 months since the relevant provisions of the Overseas Investment Act 2005 commenced, and how does this compare with the total for the 21 months prior to their commencement?
Hon Dr MICHAEL CULLEN (Minister of Finance) Link to this
The total net area of land sold to overseas investors for the 21 months before was 1,935 hectares—that is net, of course—and that figure increased in the 21 months after to 237,588 hectares. However, four significant and unusual forestry land transactions are excluded. The net area of land sold in the 21 months before is 31,320 hectares, and the net land for the 21 months after is 26,944 hectares.
Rt Hon Winston Peters Link to this
Can the Minister of Finance confirm, in referring to those four rather particular areas of sale, that even if the sale of Carter Holt Harvey’s forestry interests are not included, the total net area of land sold to overseas investors since the Overseas Investment Act commenced is more than 30 times that sold in the equivalent period prior to the Act; and is he satisfied with an Act that is virtually rubber-stamping the sell-off of our land to the highest foreign bidder?
Hon Dr MICHAEL CULLEN Link to this
No, I do not think that is the correct representation, because, for example, the significant thing about Carter Holt Harvey’s sale is that the forests were in overseas ownership and were purchased by a New Zealander with the intention of reselling them. So when the accounts are calculated at the point of purchase, there is a large net repurchase by New Zealand, and at the point of sale there is then a further net purchase offshore. The actual net outcome of the total transaction over a period of a couple of years was no movement, at all.
Hon Mark GoscheWhat are the details of the four unusual transactions the Minister referred to in his primary answer?
Hon Dr MICHAEL CULLEN Link to this
Firstly, the sale of the Fletcher Challenge forests in February 2004 resulted in reduced overseas ownership of a net 71,000 hectares. Those forests, of course, had previously been in New Zealand ownership, and were then moved offshore, then came back onshore. Second, there was the purchase in September 2005 by GMO Renewable Resources of the US of a 22,416 hectare block of Ngāi Tahu’s forests in Otago. Third, in the same month James Fielding Funds Management of Australia purchased a net 10,344 hectares of the Evergreen forest, and, fourth, of course, in October 2006 there was the sale offshore of Carter Holt Harvey’s forestry interests, which had only a couple of years or so previously been brought back onshore by the buy-out of Carter Holt Harvey by Graeme Hart.
Jeanette Fitzsimons Link to this
Can the Minister confirm the Reserve Bank’s guesstimate that up to 5 percent of residential property is now owned by overseas investors, thereby pushing up the price of housing; if he cannot confirm that, is it because the Government no longer keeps statistics on foreign ownership, so no one actually knows?
Hon Dr MICHAEL CULLEN Link to this
It is a guesstimate, and, indeed, we have never kept statistics of overseas ownership at the individual household level, because most domestic housing would not have triggered, either before or after 2005, the interest of the Overseas Investment Commission or the Overseas Investment Office. So it is quite difficult to arrive at any accurate estimate of the offshore ownership of New Zealand houses. That, of course, can take many forms, such as ownership by people who come to New Zealand for periods of time during the year, ownership by offshore interests of properties that are rented out to New Zealanders, and ownership by New Zealanders who currently live offshore but intend to return to New Zealand. All of those are various forms of overseas ownership of New Zealand household property.
Rt Hon Winston Peters Link to this
Prior to my tabling the various figures to do with the pre and post-Act periods, is the Minister aware that these figures represent just the tip of the iceberg, given real estate agents report that foreigners are increasingly opting for smaller pieces of land to get around inspection by the Overseas Investment Office, and that locals are losing out as properties rise out of their price ranges, and does he believe this situation—and I quote from the Act itself—results in “substantial and identifiable” benefits to New Zealand?
Hon Dr MICHAEL CULLEN Link to this
These are actually quite complex issues. Let me take another example. First of all, most of the land that is sold offshore is not in fact urban residential property land. It is farmland or—particularly the large blocks—it is forestry land. So the numbers I give in the House are actually almost entirely about farmland and forestry land. Secondly, in terms of urban land, it is not uncommon for Ministers to sign out approvals for the purchase of urban land for urban subdivision, but, because part of the land being bought for subdivision borders upon, say, a reserve or a river, it requires Overseas Investment Office approval. Of course, once subdivided that land is then sold back, and if any of it was sold to overseas ownership—even if of sufficient size—it would be only that part of the remaining land that then bordered upon a reserve or a river. The great bulk of the developed land probably would not border in that regard and would not come within the purview of the Overseas Investment Office.
Rt Hon Winston Peters Link to this
I seek leave to table the figures for the relevant periods asked about in the primary question.