NZ land sales to foreigners down 72%

New Zealand's land sales to foreigners fell 72% in the seven months to July 31, year-over-year, to just 25,484 ha compared with 90,284 ha in the same period of 2011, according to recent data from the Overseas Investment Office, reported The Wall Street Journal (WSJ) on 3 September.

Land sales to foreigners lately have been mostly in forestry, although even this land investment is less attractive because of weak carbon prices and uncertainty about the future of carbon trading, the WSJ noted.

The investment in New Zealand’s forests had been to take advantage of high prices for carbon credits, said Warwick Searle, rural real estate agent for LJ Hooker. Currently, European carbon credits are trading at about €3.00 compared with a one-year peak of €9.05.

Chinese investors in New Zealand land appeared to be awaiting the ruling in a court case before resuming land purchases, said Jason Young, a lecturer at Victoria University in Wellington who is an expert in Chinese investment in New Zealand, the WSJ reported.

Young forecasts that investment will rise in the short-term and the long-term. The Chinese wanted to know that all investors were treated equally by the New Zealand government in handling the Shanghai Pengxin Group’s land purchase, he said. The court ruled in favour of that sale in August.

Source: Industry Intelligence Inc., The Wall Street Journal

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