High demand, short supply
New Zealand’s luxury residential rental market is failing to keep pace with global demand, with agents warning that half of all high-net-worth travellers seeking premium stays are being turned away due to a chronic shortage of suitable homes.
Greg Owen (pictured), co-founder of accommodation agency Stay Luxe, said the supply constraints have reached a tipping point.
“Many of these homes sit unoccupied for extended periods as their owners travel overseas or relocate to other centres, leaving high-value assets idle rather than contributing to the tourism economy. Unlocking that capacity is critical to the expansion of New Zealand’s accommodation infrastructure,” Owen said.
“We are seeing unprecedented demand from wealthy individuals and families looking for prestige residential properties with privacy, premium finishes, and a level of professional management. Without a larger pool of stock, these travellers and their spending power will go elsewhere.”
“Try before you buy” investors
Luxury rentals are not only about accommodation but also serve as a gateway to foreign property investment.
Owen said typical stays range from three weeks to 12 months, with many clients using luxury rentals as a “try before you buy” pathway into New Zealand property.
That demand is expected to rise further, with new rules allowing wealthy overseas investors on eligible visas to purchase or build one luxury home worth at least $5 million, while the wider foreign buyer ban remains in place.
“Many of our clients will stay for months in premium homes, experiencing suburban environments, local communities, and schooling options before deciding to invest millions of dollars in a luxury property. That’s something a hotel stay simply cannot replicate,” he said.
Owen estimates one in 10 renters eventually go on to purchase the homes they stay in, creating a direct pipeline for foreign investment.
Lost economic opportunity
Stay Luxe receives up to 50 enquiries a week from overseas visitors willing to spend as much as $15,000 a night on exclusive homes and services such as chefs and spa treatments.
“At the moment we are turning away as many guests as we accept. Ultimately, this means homeowners are losing out, and hundreds of thousands of dollars are being lost every week,” Owen said.
He gave the example of a $500,000 booking for a 90-day stay, with another $150,000 earmarked for in-house staff, cleaning, and ancillary services. In another case, a $150,000 waterfront rental was confirmed in a single online transaction, showing the level of confidence wealthy clients have in the market.
Owen stressed that luxury rentals generate two to three times the revenue of standard leases and create local jobs in cleaning, property management, hospitality, and wellness services.
Adviser opportunities in luxury rentals
For mortgage advisers, the shortage of luxury rentals highlights a growing investment opportunity. Property owners with underutilised high-value homes could command significant income in the short-term rental market while keeping assets in professional management.
Owen also noted that luxury rentals often act as stepping stones for foreign investors who later commit millions to the housing market. Advisers working with high-net-worth clients or developers may see opportunities in structuring finance for premium rental portfolios or conversions.
“Australia has built well-developed inventory levels and systems to cater for high-net-worth travellers. By contrast, New Zealand’s limited pool of suitable homes is leaving money on the table,” Owen said.
“Expanding this market isn’t just about private gain. It supports local jobs, boosts hospitality and service industries, and builds pathways for foreign investment.”
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