Overseas Investment Bill changes a win for Property Council
Property Council has been encouraged by many of the recommendations for the Overseas Investment Bill by the Finance and Expenditure Select Committee. Several of the changes have recognised the significance of foreign investment for large-scale residential developments to be viable. They have heard the industry's concerns that if the Bill had progressed in its current form it was highly likely to decrease the number of residential developments, in conflict with the Government’s intention to increase our housing stock.
The Select Committee recognised that large developments often rely on the pre-sale of units to raise funds and satisfy financiers that a project is viable. Overseas investment is key to ensure developers can access sufficient funds to build. They noted that requiring overseas persons to on-sell would reduce the attractiveness of some large projects and hurt their feasibility. This was contrary to the intention of the Bill, hence the Committee's recommendation to make various changes that will allow developers of large multi-storey apartment buildings of 20 or more units will be able to apply for an exemption.
They have also recognised that increasing rental stock also meets the 'commitment to New Zealand' test and has recommended changes be made so if the dwellings are to be maintained as rental properties or in shared equity developments or sold under a rent-to-buy model, they do not need to be on-sold after two years as initially proposed.
The Select Committee has suggested changes to allow the Minister to make determinations on developments that show the benefit to New Zealand is substantial and identifiable. This could streamline the process, however, it's difficult to know how exactly this process will be delivered until the Government provides more detail. The Committee have also suggested the Minster be allowed to make determinations on standing consents, which again could quicken the process for overseas investment.
Property Council welcomed the recommendations to ease the restrictions and look forward to continuing to work with Government to ensure that more houses can be built for Kiwis.
Author | Jane Budge
Upon joining Property Council in 2017, Jane brought a wealth of experience to the advocacy team, having worked in senior policy advisory roles at both local and central government level. Her experience spans many government departments including Standards New Zealand, the Ministry of Consumer Affairs and the Department of Social Welfare.
Jane also spent four years with the New Zealand Police, where she was responsible for the road policing strategy and policy development, and most recently she held a senior policy role at Taupo District Council. Jane’s aptitude for building relationships and eye for detail make her a formidable addition to the team.
Get in touch with Jane.