Non-residents, with the exception of Australians and Singaporeans, will no longer be able to buy in New Zealand after the parliament this week passed the Overseas Investment Amendment bill.
Instead overseas buyers will only be able to make limited investments in new apartments of large developments.
The move had been prompted by fears wealthy Chinese and other foreign buyers were among those pushing up house prices for locals.
Home values in New Zealand increased by 6.2% in the year to July, according to the Real Estate Institute of New Zealand.
Not be outbid by foreigners
David Parker, the associate finance minister said: “We’re here today to take another step toward restoring the great New Zealand dream of home ownership.
“This government believes that New Zealanders should not be outbid by wealthier foreign buyers.
“Whether it’s a beautiful lakeside or oceanfront estate, or a modest suburban house, this law ensures that the market for our homes is set in New Zealand, not on the international market.”
Instead new building projects will only get planning permission if they are reserved for full time residents.