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Housing

New Zealand to Relax Ban on Foreign Property Ownership

Strategic Insights

— 1 min read

New Zealand's Prime Minister Christopher Luxon announced a policy reversal to allow some wealthy overseas business investors to purchase a single high-value residential property in the country. The move targets holders of a residency "golden visa" reintroduced by Luxon's government in April, who will be able to buy one home worth at least 5 million New Zealand dollars ($3 million). This partial reversal of the 2018 ban aims to attract wealthy investors while addressing concerns about house prices. However, the decision has been met with opposition from critics who argue it will exacerbate the country's housing affordability crisis.

Key Takeaways:

  • The ban on foreign property ownership in New Zealand will be relaxed for holders of a residency "golden visa" introduced in April by Luxon's government.
  • The policy change will allow eligible investors to purchase one high-value residential property worth at least 5 million New Zealand dollars ($3 million).
  • Approximately 300 applications for the residency visa have been received, representing about 1,000 people, with almost 40% of applicants being from the United States.
  • The change applies to a limited number of wealthy foreigners and houses, with around 10,000 homes (less than 1% of New Zealand's housing stock) potentially eligible for foreign investment.
  • The majority of eligible homes (about 80%) are in Auckland, with around 10% in Queenstown, a popular destination for wealthy tourists.
  • New Zealand's Prime Minister Christopher Luxon argues that the policy reversal will attract wealthy investors, create jobs, and boost economic growth.
  • Critics of the policy change, including opposition Labour housing spokesperson Kieran McAnulty, argue that it will worsen the housing affordability crisis, with homelessness and unemployment on the rise.

Statistics:

  • Estimated NZ $1.8 billion in investment through the residency visa program, based on potential applications.
  • Approximately NZ $5 million (min. value of property required for purchase) invested by eligible investors.
  • Around 10,000 homes (less than 1% of New Zealand's housing stock) potentially eligible for foreign investment.
  • 80% of eligible homes located in Auckland.
  • 10% of eligible homes located in Queenstown.
  • Average cost of a home in New Zealand: NZ $767,250 (July 2023 figure).
  • Average cost of a home in Auckland: NZ $975,000.
  • 22% of Auckland's property sales to foreigners (pre-ban statistics).
  • 3% of New Zealand's property sales to foreigners (pre-ban statistics).

Sources:

  • The Associated Press
  • Real Estate Institute of New Zealand
  • Government of New Zealand figures

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