New Zealand Cracks Open Door for International Buyers

New Zealand is set to allow foreign buyers back into its luxury market in an attempt to juice its economy.

Holders of the country’s golden visas will soon be eligible to purchase homes that cost at least $3 million (NZ$5 million), Bloomberg reported. The coalition government announced the policy change on Monday, though it won’t go into effect until the end of the year.

“By opening our door just a little to allow significant investors to own a home, we will help attract more of those who want to contribute to the community and country,” Prime Minister Christopher Luxon said in a statement.

The price minimum segments the available homes in the country to a mere 0.4 percent of the housing stock, or 7,000 properties. Most of those properties are in Auckland and only a slim minority of those homes — around 350 — are up for sale annually.

Overseas buyers have been kept out of New Zealand’s homeowner ranks since 2018, when then-Prime Minister Jacinda Ardern tried to cool down an overheated housing market. Citizens, residents and nationals from Australia and Singapore were exempted.

Prior to the ban, foreigners only accounted for 2 percent to 3.5 percent of home purchases in the country. Their return isn’t expected to hamper affordability, according to a property economist, who pointed towards the weak labor market as a bigger cause of concern.

In August, home prices in New Zealand dropped for the fifth consecutive month, hitting a two-year low.

New Zealand has been looking to bring in more foreign capital under Luxon’s watch. The golden visa program relaunched only five months ago, granting residency to those who offer major investment.

As of the end of last month, slightly more than 300 applications were submitted for a golden visa, covering approximately 1,000 people, according to Immigration New Zealand data. Roughly 40 percent of the applicants are Americans.

— Holden Walter-Warner