The National Party had promised to reverse the ban and allow foreign buyers to buy homes priced more than $2 million, with a 15% tax on the purchases used to help fund tax cuts.
However, the plan has been scrapped as part of National’s coalition agreement with New Zealand First.
Bayley’s Queenstown owner and manager Stacy Coburn said lifting the restrictions on overseas buyers buying property would have likely had a positive impact on the market for expensive properties.
"It probably would create some great momentum and some positivity by increasing a larger pool of buyers for properties."
Mr Coburn said it was "hard to say" the effect it would have on the market.
"We feel, in part, it is disappointing."
"And, in part, it’s probably driven the price up to some degree and they probably would’ve taken away from local buyers.
"Some astute buyers here or even overseas understand how much a place is worth or where the market sits and may be prepared to pay so much.
"So prices probably would’ve been driven up if that [new] policy was in place."
But he explained that, although the decision could slow down the rising cost of property, he thought the effects would likely go unnoticed.
"I think the market will continue on with its current trend."
Harcourts Queenstown branch manager Priscilla Uhrle anticipated there would "be some vendors disappointed with this decision".
"There will also be disappointed foreign buyers who have fallen in love with our region and there will also be philanthropy loss to our community, that foreign investment brings."
Ms Uhrle felt lifting the ban would have caused an increase in sales of property above $2m and said their "overseas engagement soared since National’s announcement regarding foreign buyers".
She explained that, due to population growth in the Queenstown-Lakes district, they continued to experience a housing shortage, especially due to the high costs of building.
"These drivers will remain and continue to put pressure on property prices in our region.
"This announcement is more likely to impact the increased volume of residential property sales in the $2m-plus price band, not necessarily values."
