A new chapter for foreign buyers

The Government’s decision to loosen restrictions on foreign property buyers is set to bring fresh capital into New Zealand’s housing market.

Prime Minister Christopher Luxon confirmed on September 1 that overseas investors with an Active Investor Plus residency visa will now be able to buy or build one home here, provided it’s worth at least $5 million.

For Mark Harris, managing director of New Zealand Sotheby’s International Realty, the move makes sense in the current economic climate.

“We are delighted by the announcement,” he says. “Given the state of NZ’s economy, we need as much productive investment as we can get. By allowing foreigners to own a home here, it encourages them to invest in other business ventures in NZ, which then leads to capital expenditure and job creation."

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“We have many examples of foreign holiday homeowners here who - prior to 2018 - contributed greatly to the community with business investment. In recent years, Australia has benefitted from the investors NZ has turned away.”

Harris believes the policy is carefully calibrated with the entry threshold set at $5 million - less than 1% of New Zealand homes.

“The ban was introduced to protect first home buyers but it’s had minimal effect as prices have still increased dramatically over the past six years,” he says. “Allowing quality foreign investors into the country while introducing a value hurdle protects the domestic buyer and limits the number of investors who can purchase.”

The effect of this recalibration will be closely watched - not only for its potential to attract high-value property buyers, but also for the wider economic stimulus it may bring.

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