Houses in Queenstown, Lake Hayes and Auckland suburbs Devonport and Remuera, as well as large plots of Central Otago land are among the properties foreign buyers might be able to buy under new rules.
The government has confirmed that holders of so-called “golden visas” will be able to buy or build one home worth at least $5 million.
Since 2018, buyers have generally needed to be residents or citizens to be allowed to buy any residential property.
But there are only about 7000 homes in New Zealand in that price range.
Cotality chief property economist Kelvin Davidson said $5m+ homes were only about 0.4 percent or 0.5 percent of all dwellings.
In Auckland, there were 4300, or about 0.8 percent of all properties.
There were another 1250 in Queenstown, about 5.5 percent of that market.
“It’s a more notable share of the Queenstown market but even in Auckland it’s fairly small,” Davidson said.
“If you add up 4300 in Auckland and 1250 in Queenstown, it only leaves about 1500 across the country everywhere else.”
Trade Me has 424 properties listed nationwide with a price indication of more than $5m, including a six-bedroom house in Rodney, Auckland, a clifftop house in Devonport, a waterfront home in Matakana, and a five-bedroom house with tennis court in Remuera.
In Otago, there are 74 properties currently listed above the $5m mark, 58 of those in the Queenstown-Lakes area.
There are also large plots of land for development, including large rural landholdings in Wānaka and higher-density housing areas in south Auckland.
Real estate agency Barfoot & Thompson said it had 16 sales worth more than $3m in July.
The $5m properties in Auckland would be mostly around Herne Bay, Remuera, St Mary’s Bay and Westmere, Davidson said.
“Will this transform NZ housing market? It seems unlikely. Could it have an effect in some fancy suburbs of Auckland and upmarket properties in Queenstown? Possibly. But nobody likes overpaying. It’s all very well to be wealthy but you’re still not wanting to overpay. I still think it’s hard to get carried away about the scale that this might impact the New Zealand housing market.”
He said any transaction would also rely on the relevant properties being available for sale.
“It’s all very well to say there’s 7000 properties, that’s a small number in itself, but they have to be for sale… in a given year there might only be 5 percent of properties actually listed so out of that 7000 there might only be about 300 or 400 actually listed.
“For some upmarket real estate agents this will be a good piece of news but for the housing market as a whole I don’t think this will change it from a subdued state to a fresh boom.”
There was no mention of taxing the foreign buyers when the announcement was made on Monday.
National campaigned in 2023 on letting foreigners buy homes worth more than $2m subject to a 15 percent tax, but was forced to abandon that plan during coalition negotiations with NZ First.
Brad Olsen, chief executive at Infometrics, agreed there would be limited impact because of how different $5m homes were from the rest of the stock of housing.
“They’re buying in a very different market as opposed to a $600,000 house in Whangarei – it could influence places with a higher average house price, parts of Auckland and Queenstown but even there the values are on average close to $1m, $5m is still quite a big difference.”
Davidson said it seemed to be a decision based on proving New Zealand was “open for business” for high-wealth individuals.
