New Zealand's new Prime Minister Jacinda Ardern said Tuesday her government will ban most foreign investors from buying houses in New Zealand by early 2018.
"We are determined to make it easier for Kiwis to buy their first home so we are stopping foreign speculators buying houses and driving up prices," Ardern said in her first post-cabinet news conference.
Her government will introduce an amendment to the Overseas Investment Act to classify residential housing as "sensitive," which means that only residents will be able to buy existing residential dwellings.
Australians will be exempt as New Zealanders are in Australia.
Under the plan, foreigners would still be able to buy land and develop housing on it.
The legislation would be introduced before Christmas, so the changes could take effect when the legislation was passed in early 2018.
Ardern said the proposed change would not impact on any existing trade deals except the Singapore Closer Economic Partnership, but the government was working with Singapore on the options.
It would also not affect the Trans Pacific Partnership (TPP) which New Zealand continues to pursue with the remaining 10 Pacific-rim nations as the country's Overseas Investment Act is exempted from the trade deal.
While the previous National-led government pushed for the original deal to be carried on after the withdrawal of the United States by President Donald Trump, Ardern's government wants changes.
With land issues out of the way Ardern said she would now focus on renegotiating Investor State Dispute Settlement clauses (ISDS), which would allow corporations to sue governments in a foreign country, when the Asia-Pacific Economic Cooperation (APEC) meets in Vietnam next week.
"We are concerned by ISDS clauses in the proposed agreement. These confer greater rights on multinational companies investing in New Zealand than a New Zealand company has," she said.
Her government was determined to amend the ISDS provisions of the TPP.
"In addition, Cabinet has today instructed trade negotiation officials to oppose ISDS in any future free trade agreements," she added.
New Zealanders have suffered a housing crisis in recent years.
Record immigration has led to growing demand for housing, one that the country's construction sector can't keep up with. Consequently, house prices have risen by 50 percent in the past decade while home-ownership has dropped to its lowest level in 65 years.