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NZ haven for mega-rich feeling pain of crackdown on ownership

Average asking prices for homes fall 19% in Nov from Oct after law curbing foreign ownership kicks in

Sydney

NEW Zealand's Central Otago, whose ski fields, vineyards and golf courses have made it a popular bolthole for the world's mega-wealthy, may be showing the effects of the South Pacific nation's crackdown on foreign home owners.

Average asking prices for homes in the South Island's Central Otago-Lakes District fell 19 per cent to NZ$857,011 (S$810,385) in November from the previous month after New Zealand implemented legislation restricting foreign ownership.

New listings in the region - whose property owners are reported to include hedge-fund pioneer Julian Robertson and Hong Kong-based financier Michael Nock - fell 4.6 per cent, according to a report released Monday by realestate.co.nz, the country's most popular property website.

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In October, 236 properties were listed for sale in the Central Otago-Lakes District, with an average asking price of more than NZ$1 million.

"It could be that, in the run-up to the new legislation, there was an influx of top-end properties that owners were eager to get across the sold line, or they were testing the market and would have been open to a sale at the right price," said Vanessa Taylor, a spokeswoman for the realty website. "Now that the foreign ownership window has largely been closed, they may well have sold the property or taken it off the market."

Prime Minister Jacinda Ardern's government implemented the Overseas Investment Amendment Bill on

Oct 22 after she campaigned on a foreign-buyer ban in last year's general election, saying overseas speculators had driven up house prices and made property unattainable for many young New Zealanders.

Prices have surged more than 60 per cent in the past decade amid record immigration and a construction shortfall, driving home ownership to its lowest level since 1951.

The average asking price in the Auckland region was NZ$949,345 in November, 1.6 per cent less than in October.

There were 10,431 homes for sale in the country's most-populous city, or 5 per cent more than a year earlier. Nationally, asking prices for properties averaged NZ$653,575 last month, down 3.3 per cent from October.

"While there has been some regional variances this year, nationally we have seen a relatively stable asking-price environment, with average asking prices sitting around the NZ$650,000 mark during 2018," Ms Taylor added. BLOOMBERG