global marketing 21

Please read and answer the following questions

New Zealand Haven Feeling Brunt of Investment Policy

Gale, J. (2018, December 02). New Zealand Haven Feeling Brunt of Investment Policy. Retrieved December 2, 2018, from


Prime Minister Jacinda Ardern implemented the Overseas Investment Amendment Bill in New Zealand in October 2018. Over the last 10 years prices have increased some 60%. With record immigration and a shortfall in housing construction, home ownership hit the lowest it had ever been since 1951. Prime Minister Ardern claimed that overseas speculators drove up house prices, making property unattainable for young New Zealanders. In November average asking prices in the South Island’s Central Otago-Lakes District fell 19 percent from the previous month.

236 properties in the region were listed for sale in October, averaging NZ$1 million. Vanessa Taylor, a spokeswoman for, said that the prices could be owners of top-end properties that wanted to push them across the sale line while prices were still high, or sellers that could have been testing the market and would have taken a lower price if offered. Last month alone asking prices in the region dropped 1.6 percent, averaging NZ$949,345. Nationally prices averaged NZ$653,575 in November, down 3.3 percent from October.

Relevance to text readings

The legislation implemented to restrict foreign home ownership in New Zealand has many global effects. Anyone not native to New Zealand will now not be able to make an investment in NZ property the same way they could have before. It also impacts foreign investors that currently own property in New Zealand. Once the policy was put into place, the potential buyer market was decreased immensely. If foreign investments are what drove the prices up and now they are restricted, current foreign investors stand to take a significant loss if they sell their property. A home that may have been purchased last year at over NZ$1 million may now be selling for a significantly lower price. While it is great that the Prime Minister is actively thinking about making housing affordable to young New Zealanders, foreign investors are not benefiting from the bill.

Questions for Consideration

1. Could the implementation of this policy in New Zealand impact the housing market in other countries? Why or why not?

2. Could this policy impact/affect global perception of New Zealand and potential business with them in the future?

3. Do you think that it is possible the significant increase in housing prices was directly affected by the cultures of foreign investors?

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