Amidst the COVID-19 pandemic, Hawaii News Now reported that the Hawaii Senate passed a bill to ban foreigner home purchases. According to Hawaii News Now, the bill:
- Was amended by The Senate Water and Land Committee to delay it's effective date until 2050.
- Would prevent people who are not US citizens and legal residents from purchasing homes more than five years old.
According to Title Guaranty, foreigners only accounted for 3% of all purchases in 2019. The top ten foreign buyers, ranked highest to lowest, were Japan, Canada, Korea, Hong Kong, Taiwan, New Zealand, Singapore, Guam, and Australia. The irony is Canada, New Zealand, and Australia have blamed foreign investors for driving up real estate prices. In addition, the majority of Singapore's residents live in government owned housing.
As I brainstorm, I thought of the following:
1. What type of homes are foreigners buying in Hawaii? If foreigners are buying condo-hotel units or luxury properties, would banning foreigner buyers actually help local people in their homeownership journey?
2. Other countries have banned foreigner buyers (or have strict restrictions). What would be the economic effects if Hawaii banned foreigners from owning real estate in Hawaii?
3. If banning foreigner buyers is a solution to making home prices more affordable for local residents, is an effective date of 2050 too far away?
4. Real estate home prices have steadily increased in Hawaii over time. However, it seems like wages have been stagnant. Would increasing wages be a better solution to helping local people buy homes?
I'm interested in hearing your thoughts on this topic. Don't hesitate to contact me.
Stay safe and healthy.