WELLINGTON: New Zealand on Monday said it will open its housing market to wealthy foreigners who invest in local businesses, reversing a previous ban in expectation it will boost economic growth.
New Zealand Prime Minister Christopher Luxon said on Monday investors on the foreign investor migrant visa reintroduced in April would be able to buy or build one home if it costs at least NZ$5 million ($2.94 million).
Previously those on the visa but not in New Zealand for six months of the year were banned from buying property.
“This change navigates a path between those who do not want foreign ownership opened up, and the desire to attract high net worth investors by deepening their connection to our country to help grow the economy,” Luxon said in a statement.
The government hopes relaxing the ban will make investing here more attractive. It is part of broader government efforts to increase foreign investment into the country to boost an economy that dipped into a recession in the second half of 2024 and has remained weak in the first half of this year.
In April, it loosened rules around eligibility for the so-called "golden" visa known as the Active Investor Plus residency visa. This included lowering the minimum required funds for the category that focuses on higher-risk investments to NZ$5 million from NZ$15 million and removing the English language requirement.
The government said 301 applications for the visa have been received and if these are all approved and proceed it means a potential investment of at least NZ$1.8 billion in the country’s economy.
Foreign investment in New Zealand’s property market has been a concern for locals as it is seen as a significant driver of house prices and in 2018 the then Labour-led government passed a law to ban many non-resident foreigners from buying existing homes.
Luxon said less than 1% of New Zealand homes were worth over NZ$5 million and they believed this changed balanced the need to meet the needs of high-net worth investors with the desires of those who do not want foreign ownership.
Mischa Mannix-Opie, from Greener Pastures, which specializes in helping people get residency in New Zealand through investment, said while not everyone wanted to buy a house in New Zealand, their clients would be pleased to have the option.
“It really enhances the proposition,” she said adding for many people it’s lifestyle that attracts them to investing in New Zealand and being able to buy a home would help them achieve that lifestyle.
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