New Zealand's newly elected prime minister, Jacinda Ardern, has followed through on her election promise to ban foreign nationals from buying established property.

In Ardern's only second cabinet meeting, she and senior ministers agreed to ban foreign nationals from buying existing housing stock in an effort to stall property speculation and address the nation's housing affordability crisis.

The new law will take effect from 2018.

Australians will be exempt from the law, just as New Zealanders are exempt from similar laws in Australia.

“During the campaign, we talked about our plan to fix the housing crisis. An important part of that plan is banning foreign speculators from buying existing homes here,” Ardern said in a statement on her social media account.

New Zealand property prices have risen dramatically in the past decade. In Auckland, the median house price has risen nearly 70 per cent in the past five years to $760,000 (NZ$845,000), according to data from the Real Estate Institute of New Zealand.

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