Person A has property and wants to sell it to person B, and person C wants to get the property at a lower price, so he forbids, by force, for person A to sell it to B.
Why do you think person C is getting screwed if A sells to B?
A thought experient: What if the landowners went the opposite way: property can only be sold to foreigners that are poorer than nzlanders. How would that go in this scheme of things.
The average price of property grows due to the additional demand from speculators, foreign and local, pushing up the price that C has to pay for any other property as well. It's not that complicated.
The primary purpose of housing is not to make people money, it's to house people. To serve that goal the lower the price is the better.
In that context it's clear that it's not the relative wealth, or even foreigner vs local that's the problem, it's speculation of any kind. So no, in your thought experiment it's no better to sell to foreign speculators regardless of their relative wealth.
A more interesting thought experiment is what happens in an economy when property speculation doesn't happen. House prices are lower, as demand is only from those that want to live in them and those that want to buy them to lease them out. With lower prices paid, there's more money (on average) in everyone's pockets - including those that rent, due to lower rental prices. This increase in money stimulates the economy, especially because most of the relative benefit accrues to those on lower incomes that spend most of their income to live. The economy is further benefited as much of the money that would have otherwise been dumped into non-productive real estate speculation instead flows into real investment.
The end result of discouraging property speculation is enormously beneficial to the country. Investors can speculate in the stock market or whatever else they like, because people don't live in shares, but the housing market exists to serve a purpose... and that purpose is not to make people money. That's an acceptable side effect so long as the primary purpose is fulfilled, but in NZ and AU it's failing.
Why do you think person C is getting screwed if A sells to B?
A thought experient: What if the landowners went the opposite way: property can only be sold to foreigners that are poorer than nzlanders. How would that go in this scheme of things.