- Australian property investors find New Zealand homes more affordable and easier to buy.
- Changes in Australia’s budget, including ending negative gearing, make investing there harder.
- New Zealand’s lack of capital gains tax and stamp duty attracts Australian investors.
Australian property investors eyeing New Zealand homes have been surprised by how affordable and relatively straightforward they are to buy.
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They compared New Zealand’s flat housing market and purchase rules to the situation they face at home, citing policy changes unveiled in their country’s budget last month, which they claim will make life harder for investors.
Australia’s Federal Treasurer Jim Chalmers announced the end of negative gearing for investors and introduced a new inflation-adjusted capital gains tax.
The Budget has already hit the brakes on Australia’s heated housing market, where investors have accounted for 40% of new home loans. The auction clearance rates hit a new low of 54% last week, and the median sale prices in the country’s state capital cities, including Sydney and Melbourne, recorded their first decline since January last year.
Experts told OneRoof that Australian investors would likely turn their attention to New Zealand as a result of the changes.
Property prices in Australian state capital cities, including Sydney, fell in May for the first time since January 2025. Photo / Getty Images
Ray White economist Atom Go Tian said Australians were subject to the same property-buying rules in New Zealand as locals, while New Zealanders purchasing in Australia were treated as foreign buyers unless they lived there.
New Zealand homes were also cheaper: New Zealand’s average house price was around $800,000, while Australia’s was $1m.
Australian buyers have typically concentrated on Auckland and Queenstown, with the latter a magnet for those looking for a holiday home. Tian said he would be keeping an eye on the data to see if Aussies started to buy in other parts of the country.
“Anecdotally, there’s a lot of evidence encouraging Australian investors to consider New Zealand.”
Opes Partners economist Ed McKnight agreed that New Zealand was a far easier place to buy an investment property than Australia, which is probably why Kiwis stick to New Zealand.
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One of New Zealand’s biggest advantages over Australia was its tax system.
McKnight said Australians faced all sorts of costly taxes, including stamp duty, capital gains tax and possibly land tax, which were largely non-existent in New Zealand.
“One of the reasons we see Kiwis start to appreciate New Zealand properties is when they realise how difficult it is to invest overseas, or rather, see the additional costs involved in getting there,” he said.
“If you are based in New Zealand, not only do you pay the standard stamp duty, but you pay the higher one because you are an investor, and you pay a higher one again because you’re domiciled overseas, so the stamp duties really start to add up.”
Mike Rudd, the Auckland head of taxation services for Baker Tilly Staples Rodway, agreed that New Zealand’s tax rules definitely worked in favour of Australian investors.
Queenstown has been a popular destination for Australian buyers, but they may look further afield. Photo / Getty Images
“The contrast is startling between an Australian buying a rental property here vs a New Zealander buying a rental property in Australia,” he said.
“Generally, Australians are amazed by our lack of capital gains tax. They really loved that part.”
New Zealand also didn’t have stamp duty, and Australians were treated to the same tax rate as Kiwis.
Rudd said Australian residents might have to pay some Australian taxes, such as capital gains tax, when selling a New Zealand property, but overall, the taxes would be less costly.
Unfortunately, New Zealand residents buying in Australia were actually hit with much higher taxes than locals. “The cost and the penalties for being a New Zealander buying those [Australian] properties are significantly greater.”
Rudd said most of the New Zealanders he dealt with already lived in Australia and were buying for lifestyle reasons and not for investment.
“Generally, you have to really want to spend some time on the Gold Coast or wherever it is for a holiday home to talk yourself around all those other tax penalties because the cost of just owning a property in Australia is very expensive from a tax and levies point of view,” he said.
“It’s less of an investment decision and more of an emotional holiday home with rental income back up or support to pay for the cash or foreign owner surcharge and all that sort of good stuff.”
Ray White economist Atom Go Tian says the rules are far more favourable for Australians wanting to buy property in New Zealand. Photo / Supplied
Twine Advisers director and mortgage adviser Eugene Bartsaikin said most New Zealand banks – although not all – were happy to give Australians loans, and in most cases the process was relatively straightforward.
Bartsaikin said Australian borrowers would typically tap into the equity in their existing home or source funds elsewhere, then transfer the money across the border to use as a deposit on a New Zealand property.
“It’s fairly routine. The main thing here is that although the banks in New Zealand are fairly amenable to working with Australians and quite pragmatic, they still stress-test [applicants]. So, households with a lot of borrowing or property investors with a lot of properties might be stress-tested more than they would be if they were buying a property in Australia.”
Bartsaikin said New Zealand properties tended to have higher yields than Australian ones, which he said was often key for those buying a rental. “It’s very difficult to find anything even remotely cashflow neutral in Australia,” he said.
“Over the last five years, the [house price] growth in places like Brisbane and Perth has been extreme. A lot of locals actually find it quite difficult to keep up with the cost of living.”
Mortgages Plus director Chris Dodson, a Kiwi based in Australia, said Australia’s Budget changes were significant and would change buyer behaviour.
“People are still making heads and tails of it. It hasn’t actually been fully legislated yet, but it’s a very contentious Budget. Areas like Queenstown and Wānaka seem wonderful to investors, but I think you would only want to do that after your third or your fourth [investment] property.”
Dodson said most Australians who had bought in New Zealand had either bought a holiday home there or had ties to New Zealand. He is currently working with a New Zealand couple in Perth who want to take advantage of the equity growth in their Australian home and buy a second property in Tauranga or Rotorua.
“At that point, they are sophisticated investors because they’ve got assets on both sides of the Tasman.”
However, Dodson said Australians may not decide to cross the Tasman when they could still pick up homes in Melbourne for A$800,000. “It’s a lot easier to invest in Melbourne than it is in New Zealand,” he said.
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