Foreign interest in New Zealand properties appears to be
unrelenting, with large corporations and offshore fund managers
targeting dairying and forestry.
Whether to embrace foreign investment or demand ownership
stays in local hands has longtime foes Federated Farmers and
the Labour Party at loggerheads.
For the five years to last December, the Overseas Investment
Office (OIO) approved 239 foreign investment applications to
buy agricultural properties, totalling 281,000ha, while
forestry and logging approvals stood at 81, covering
Of the 72 industries covered by the OIO, none came close to
agriculture and forestry's 320 application approvals.
Residential/lifestyle properties numbered 66, residential
care 22, accommodation 23 and heritage protection 20.
The total gross value of all purchases during the past nine
years, covering all sector sales, is beyond $90 billion.
Labour's finance spokesperson David Parker said home
ownership rates were the lowest in 50 years and ''a sure sign
of rising inequality''.
''The same thing is happening to our farms, with owner-ship
increasingly concentrated amongst an ever-wealthier small
''This is made worse by allowing overseas ownership of our
farms. Overseas buyers compete with locals and make it less
likely sharemilkers can graduate to owning their own farm,''
Mr Parker said.
Outgoing Federated Farmers president Bruce Wills said the
issue was both ''emotive and contentious'' for members, whose
views were divided.
Some saw foreign money as the obvious answer for further
investment, while others wanted to pass on farms to the next
Mr Wills said he was concerned about mounting rural debt,
around $52 billion, and questioned where future investment
would come from.
As with the sharemarket, commercial properties, bank
ownership and private New Zealand businesses, there was not
enough investment capital in the country to go around, yet
none of those other asset-owners came in for as much public
scrutiny for selling their respective assets.
''We are facing this dilemma because we're poor savers. Stop
borrowing as a nation and start saving,'' Mr Wills said of
the lack of local capital.
Mr Parker rejected that argument, saying dairy production and
output during the past decade had been achieved without
relying on foreign investment.
He said UBS Global Asset Management had announced a
''farmland investment advisory service'' to meet growing
institutional demand, particularly from Asia.
The new capability would offer direct farmland ownership.
UBS was contacted for comment in Auckland yesterday, but did
Mr Wills favoured a pastoral land register of overseas sales,
which could be tracked, but said Minister of Finance Bill
English told him 18 months ago a register ''was too difficult
''They are forming a register in Australia, which we're
keeping an eye on,'' he said.
A pastoral land register would present the correct facts and
figures: supporters claimed only 2% of land was in foreign
hands while opponents argued the figure was 10%, Mr Wills
Where once a dairy farm selling for $8 million was a news
item, they are now advertised for $10 million, $12 million or
$18 million, without fanfare.
Mr Wills said: ''That's a good point ... it makes it hard for
''Many would argue the values are too high. I'm concerned at
the price levels; people forget they can drop ... there will
be a correction,'' he said.
Mr Parker said sales to foreign buyers meant Labour's polices
''to clamp down on foreign buyers of our homes and farmland''
was the right thing to do.
''New Zealanders are already amongst the best farmers in the
''Selling off the future income by allowing our productive
farmland to be sold off to the highest offshore bidder makes
He highlighted selling of forestry in the 1990s and early
2000s as a ''salutary'' example of why asset ownership should
not go offshore.
Mr Wills said the OIO application criteria was analysed as
the fifth ''toughest'' in the OECD group of countries to gain
approval, which meant ''hundreds of millions of dollars was
bypassing New Zealand'', for asset investment elsewhere.
''We don't have the capital within our own shores and will
[subsequently] grow slower, and see [farm] values decline.''
Mr Wills said interest was high in the rural sector at
present but in the long term, over decades, farming could be
seen an illiquid investment, delivering a poor rate of