- Prime Minister Christopher Luxon announced foreign buyers with a “golden visa” can purchase homes worth $5m or more.
- The Active Investor Plus visa requires a minimum $5m investment, good character and acceptable health.
- Foreign buyers will be limited to premium properties, ensuring no competition with first-home buyers.
The Government has announced it is loosening the foreign buyer ban.
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Since 2018, only citizens, tax residents and nationals from Australia and Singapore have been able to freely buy houses in New Zealand.
However, Prime Minister Christopher Luxon today told media that foreign buyers with a “golden visa” would soon be able to buy homes worth $5 million or more without approval from the Overseas Investment Office.
“The ban on foreigners buying residential housing will remain. However, the Government wants to bring additional investment, skills, ideas and connections to New Zealand, and the Active Investor Plus residency visa allows that,” he said.
“It offers residency to a migrant who invests a minimum of $5 million to help grow the economy, passes a good character test, and has acceptable health.
“But, because Active Investor Plus residency visa-holders do not have to be in New Zealand for six months of a year, the foreign buyer ban means some do not meet the threshold for buying a house under the Overseas Investment Act.
“The Government has therefore decided that people with an Active Investor Plus residency visa will be allowed to buy or build one home.
“The minimum value of the house that can be bought or built will be set at $5m – which equates to less than 1 per cent of New Zealand houses.”
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Luxon said there had been more than 300 applications for the Active Investor Plus residency visa since it was re-launched on April 1. “If all these applications are approved and proceed, it means a potential total minimum investment of $1.8 billion in the New Zealand economy.”
The visa, formally known as the Active Investor Plus Visa, is currently available to wealthy overseas people who are prepared to invest a minimum of $5m in New Zealand. Under the current rules, they still can’t buy a house until they become a resident.
OneRoof reported yesterday that the real estate industry was anticipating an announcement from the Government on foreign buyer rules after today’s Cabinet meeting.
Prime Minister Christopher Luxon and Finance Minister Nicola Willis had signalled the changes last month. Photo / Getty Images
Less than two weeks ago, Luxon told Newstalk ZB’s Mike Hosking that a deal on the foreign buyer rules had been done with his Coalition partners, and that the legislation would be enacted this year.
He signalled that foreigners holding an Active Investor Plus Visa would soon be able to buy homes in New Zealand.
Luxon and the National Party had campaigned to scrap the foreign buyer ban, arguing in the lead-up to the 2023 election that tax cuts for Kiwis could be partially funded by taxing $2m-plus property purchases by foreign buyers.
That pledge was dropped as part of the coalition agreement with New Zealand First. However, New Zealand First and its leader, Winston Peters, modified their position in recent months.
Peters told the New Zealand Herald last month that if a foreigner was coming to New Zealand “with millions of dollars to invest in this country, then yes, you could buy a house”.
Queenstown agent Hamish Walker, of Walker and Co, told OneRoof that the lifting of the ban was “a positive step forward”.
Walker & Co founder Hamish Walker says the changes are a positive step forward. Photo / Supplied
Queenstown-Lakes is already popular with foreign buyers and it’s likely the changes will lead to further heat in the market. Photo / Getty Images
“Foreign buyers play an important role in regions like Queenstown. They bring international networks, professional expertise, and connections that benefit our community. Their presence contributes to Queenstown’s reputation as a global destination.
“I’ve had clients who have contributed several million dollars towards much-needed community assets here in Queenstown, including the development of arts spaces and cultural projects. Their willingness to invest in local causes creates lasting benefits for residents and visitors."
He said the high price threshold meant foreign-buyer purchases would be confined to premium properties. “They aren’t competing with first-home buyers. This ensures that local families are not disadvantaged."
Walker said he had a network of foreign clients who were actively looking to buy New Zealand property, some of whom were from America.
Ollie Wall, of Wall Real Estate, which has sold some of the country's most expensive homes, said the changes would have an instant effect on the market.
Off-shore buyers, mostly from America, had reached out in recent months with very specific requirements, but right now there were not enough properties in the $7m to $12m price range that ticked all those boxes.
“We’ve had calls from the international press; the New York Times last week. It’s good to know that the word is out. But there’s less supply than you’d think. We’ve got more interest from buyers than we have stock," he told OneRoof.
New Zealand Sotheby's International managing director Mark Harris: "I do think we’ll see a pickup in listings. We have already got vendors waiting to see if the rules change." Photo / Supplied
“It is already giving people – buyers and sellers – the confidence to take the next steps over the last few weeks. If Kiwis think foreign buyers are coming in, that will push the market up."
New Zealand Sotheby’s International managing director Mark Harris told OneRoof: “There’s no doubt [the changes] will encourage more buyers into the market, but it won’t have a dramatic impact on price because a lot of people in this category have certainly done their research on prices and won’t pay over the odds."
“I do think we’ll see a pickup in listings. We have already got vendors waiting to see if the rules change. They’ve been contemplating listing over the last three to six months, waiting to see the rule change. But it will take two or three months to see.
“Our web traffic has had a big pick up from the US, and once the rule changes, we’ll hear from them. It is well overdue and D-day is here.”
Former Labour minister Stuart Nash, whose firm Nash Kelly Global helps high net worth foreigners navigate the “golden visa” rules, said the change was fantastic and would make New Zealand a desirable location for investor migrants looking for a “plan B – a safe haven rather than a tax haven”.
He expected to see a jump in applicant numbers, but just how many remained to be seen. “Often these people are just as passionate, if not more so, about New Zealand as New Zealanders. And it’s not just the money. They bring their competency, capabilities, experience, and networks. This is good for the New Zealand economy and good for our communities.”
Research published by OneRoof earlier this month identified just under 10,000 New Zealand residential / lifestyle properties worth $5m and above, around 7000 of which can be considered ready-to-live-in homes.
According to analysis by OneRoof's data partner, Valocity, the vast majority of these homes are in Auckland (4479) and Queenstown-Lakes (1213).
The analysis also shows just how small the prestige market is in New Zealand when it comes to sales. Last year, just 0.2% of homes sold were in the $5m-plus bracket. Even at market peak, $5m-plus sales represented just 0.4% of total sales.
Of the 31 suburbs with more than 50 homes in the higher price range, just three are outside Auckland and Queenstown-Lakes: Mount Maunganui, in Tauranga (204); Whangamata, in Thames-Coromandel (89); and Merivale, in Christchurch (54).
“All the suburbs are where you’d expect them to be and highlight just how popular the coast is in New Zealand. Most of the suburbs on the list are within touching distance of water,” Valocity senior research analyst Wayne Shum told OneRoof earlier this month.
The suburb with by far the greatest concentration of $5m-plus homes is Remuera, in Auckland. The Valocity research identified 1056 high-value houses in the wealthy inner-city enclave, more than 700 than the suburb with the next highest tally, neighbouring Parnell.
Both these suburbs are prized by upper-end buyers for the luxury homes they offer, but they are also a magnet for Aucklanders looking to get their children into two of the country’s top schools, Auckland Grammar and Epsom Girls Grammar.
What is likely is that owners of more expensive properties might choose to hold off from listing until the law changes. “If you were selling a $20m house in Auckland right now, you would have only a handful of buyers who could purchase your home. In six months, when the policy is more certain, you might have a bigger pool of buyers and potentially a bigger price.”
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