Overseas-based investors who hold a investor residence visa will now be allowed to buy a house in New Zealand, Prime Minister Christopher Luxon has announced.
The visa offered residency to those who: Invested a minimum of $5 million into New Zealand; passed a good character test; and had acceptable health.
Luxon said the minimum value of a house that could be bought by the visa holders was $5 million, a price tag on less than 1% of New Zealand’s housing supply.
Watch: Christopher Luxon speaking to media in Auckland
The Prime Minister said a ban of foreign buyers would remain.
The ban, introduced in 2018 under the Labour-led government with New Zealand First, already included exceptions for some overseas buyers, such as those from Australia and Singapore.
“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.”
“There have 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.”
‘Will not affect wider housing market’ – Peters
New Zealand First leader Winston Peters – who helped introduce the 2018 ban – said “the foreign buyers ban on housing remains”.
“However, as we signalled months ago, we have agreed that holders of a current existing Residence Class ‘Active Investor Plus Residence Visa’ holders, who are investing millions of dollars into our economy, should be able to own a home.
“We have ensured that there are tight restrictions on eligibility and what these current residence visa holders can purchase.
He said that included “existing restrictions excluding the sale of rural, farm, and sensitive land will still apply”.
“These Investment Visa holders will be restricted to only one home, either purchasing an existing home or building a new home, with the value of that home being a minimum of $5 million.
Revealed: The NZ homes back on the market for wealthy foreigners, watch on TVNZ+
“This will exclude over 99% of New Zealand homes on the market, protecting the vast majority from sale to foreigners, and will not affect the wider housing market for Kiwis.”
Meanwhile, ACT leader David Seymour said “New Zealand needs foreign investment, but foreign investment does not need New Zealand”.
“We can’t afford to turn our nose up to friends around the world who want to bring their money and their know-how to this country.
“If they want to buy a home, which is not going to affect first home buyers at all, I think we should see that as a massive win-win and a massive step forward for New Zealand and the Government.”
Buying a house ‘now even harder for Kiwis’ – Labour
However, Labour housing spokesperson Kieran McAnulty said the new exemption would drive prices up and make life harder for New Zealanders wanting to own their own home.
“Today’s announcement shows how out of touch Christopher Luxon is,” McAnulty said. “Many Kiwis are already struggling to buy a home, and he has just made it worse.
“More pressure at the top end pulls up house prices for the average Kiwi. New Zealanders should be at the top of the priority list for houses.”
McAnulty said homelessness and unemployment had increased. “National made home ownership harder for New Zealanders from the beginning when they took away the First Home Buyers grant and handed out $3 billion to property speculators instead.”
Minimum value of a house that could be bought by the visa holders is $5 million – less than 1% of New Zealand’s housing supply. (Source: 1News)
He added: “People cannot afford the basics at the supermarket but Christopher Luxon made it his priority to drive up house prices again anyway.”
Green Party housing spokesperson Tamatha Paul describe the move as “rolling out the red carpet for rich investors”.
“Last week Christopher Luxon said he wanted to see house prices increase, and now he’s working to make that happen despite many crying out for the ability to access home ownership and all of the benefits that come with it.”
She said making it easier for offshore interests to buy housing would make housing more expensive. “Real estate agents will have every incentive to boost prices to $5m in order to sell to this new wealthy market, further shunting struggling renters and home-buyers out of contention.”
