A new law passed by New Zealand’s parliament bans many foreigners from buying most types of existing homes in the country. The Overseas Investment Amendment Bill, which prevents overseas investors from purchasing existing properties in New Zealand, was passed in a 63-57 vote. The new law must still receive royal assent, which is a formality, before it comes into force.

Only non-residents are affected by the Overseas Investment Amendment Bill. Foreigners who already own homes in New Zealand and foreigners with residency status in New Zealand are not affected by the ban. Non-resident Australian and Singaporean nationals are exempt because of free-trade deals. Non- residents will still be able to make limited investments in new apartments in large developments and certain other parts of the housing market.

New Zealand’s Trade and Economic Development Minister David Parker said, “This government believes that New Zealanders should not be outbid by wealthier foreign buyers. Whether it’s a beautiful lakeside or ocean-front 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.”

The new law fulfils a campaign pledge by the new government, which came to power last year after nine years of rule by the conservative National Party. New Zealand Prime Minister Jacinda Ardern campaigned on a promise to clamp down on foreign buyers. Opponents say that the ban was unnecessary. Opposition lawmaker Judith Collins said, “We oppose the bill because we don’t believe that it actually fixes any problem. It is, in fact, nothing more than an attempt to justify some of the policies of the incoming government.”

New Zealand is facing a housing affordability crisis. Average prices in New Zealand have risen more than 60 percent in the past 10 years. Prices have nearly doubled in Auckland, the country’s largest city. According to government reports, roughly 82 percent of houses purchased in June were bought by New Zealand’s citizens or residents and 3 percent of homes were bought by foreigners. That number rises to 5 percent for the Queenstown region and 22 percent in central Auckland.