New rules open doors for investors
The New Zealand government has confirmed that holders of so-called “golden visas” will be able to buy or build one home worth at least $5 million under new rules.
Prime Minister Christopher Luxon announced that overseas-based investors with an investor residence visa – requiring a $5 million minimum investment – can now buy one home, but the broader foreign buyers ban remains.
Since 2018, only residents or citizens have generally been allowed to buy residential property, but this change opens a small segment of the market to wealthy foreign buyers, RNZ reported.
“We have ensured that there are tight restrictions on eligibility and what these current residence visa holders can purchase,” said NZ First leader Winston Peters, noting that only one home per visa holder is allowed, with a minimum value of $5 million, which “will exclude over 99% of New Zealand homes on the market, protecting the vast majority from sale to foreigners.”
Only a small slice of the market
There are only about 7,000 homes in New Zealand in the $5 million-plus price range.
“$5m+ homes were only about 0.4% or 0.5% of all dwellings,” Cotality chief property economist Kelvin Davidson (pictured left) said.
In Auckland, there are 4,300 such properties, or about 0.8 percent of the city’s housing stock, while Queenstown has another 1,250, representing about 5.5% of its market.
“It’s a more notable share of the Queenstown market but even in Auckland it’s fairly small,” Davidson said. “If you add up 4,300 in Auckland and 1,250 in Queenstown, it only leaves about 1,500 across the country everywhere else.”
What’s actually for sale?
Trade Me currently lists 424 properties nationwide with a price indication above $5 million, including luxury homes in Rodney, Devonport, Matakana, and Remuera, as well as large rural landholdings in Wanaka and higher-density development sites in south Auckland.
“It’s all very well to say there’s 7,000 properties, that’s a small number in itself, but they have to be for sale… in a given year there might only be 5% of properties actually listed so out of that 7,000 there might only be about 300 or 400 actually listed,” Davidson said.
Limited impact on the housing market
“Will this transform NZ housing market? It seems unlikely,” Davidson said. “Could it have an effect in some fancy suburbs of Auckland and upmarket properties in Queenstown? Possibly.
“But nobody likes overpaying. It’s all very well to be wealthy but you’re still not wanting to overpay. I still think it’s hard to get carried away about the scale that this might impact the New Zealand housing market.”
He added, “For some upmarket real estate agents this will be a good piece of news but for the housing market as a whole I don’t think this will change it from a subdued state to a fresh boom.”
ACT leader David Seymour called the move “a massive win-win and a massive step forward for New Zealand and the government,” arguing that wealthy investors buying high-value homes won’t impact first-home buyers.
No tax for foreign buyers
There was no mention of taxing foreign buyers in the government’s announcement.
National had previously campaigned on allowing foreigners to buy homes worth more than $2 million with a 15 percent tax but dropped the plan during coalition negotiations with NZ First.
Experts: Impact will be minimal, critics disagree
Brad Olsen (pictured right), chief executive at Infometrics, agreed the impact would be limited.
“They’re buying in a very different market as opposed to a $600,000 house in Whangarei – it could influence places with a higher average house price, parts of Auckland and Queenstown but even there the values are on average close to $1m, $5m is still quite a big difference,” Olsen said.
Davidson said the move appears to be “based on proving New Zealand was ‘open for business’ for high-wealth individuals.”
Labour’s Kieran McAnulty warned the exemption could drive up prices at the top end and make it harder for Kiwis to buy, saying, “More pressure at the top end pulls up house prices for the average Kiwi.”
Green Party’s Tamatha Paul called it “rolling out the red carpet for rich investors,” warning it could sideline local buyers.
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