Speculation grows over foreign buyer policy changes

New Zealand’s real estate sector is abuzz with speculation that the government might relax the foreign buyer ban for high-value properties.
Despite no confirmed legislative changes, real estate agents working with luxury properties are optimistic about the potential economic boost that could follow an influx of wealthy international buyers.
Government silence amid policy rumours
The National party has kept discussions under wraps since retracting its campaign promise to amend foreign purchase regulations, a move influenced by its coalition agreement with New Zealand First, OneRoof reported.
Initially, the policy aimed to levy a 15% tax on foreign property purchases over $2 million, potentially generating $740m annually.
However, Deputy Prime Minister Winston Peters hinted last year at possible concessions for ultra-expensive homes if they presented economic advantages, sparking widespread conjecture.
Signs of a shifting stance
Recent activities suggest a softening of the government’s stance, OneRoof reported.
Agents noted that the Overseas Investment Office (OIO) has greenlit several significant transactions recently. Further fueling speculation, upcoming revisions to the Active Investor Plus Visa program might include allowances for residential property investments, hinting at a more open approach to foreign investment in real estate.
Industry voices support for easing restrictions
Mark Harris of New Zealand Sotheby’s International Realty shared insights on the potential changes.
“If you are a foreigner investing $15m into the Active Investor Plus program to obtain a NZ visa, an investment in a residential home could contribute towards qualifying,” he said.
Harris, who previously advocated for relaxing the foreign buyer ban, believes no price threshold should exist if foreign purchases become part of the Active Investor Program.
Economic benefits touted by agents
Top agents argued that allowing more foreign investment in real estate, particularly in properties over $5m, could significantly benefit the economy without impacting first-home buyers.
Paul Neshausen (pictured above left) of Barfoot & Thompson, who recently attended the Luxury Property Show in Shanghai, emphasised the robust interest in New Zealand properties. Neshausen suggested that opening up the market to foreign investments above $5m could serve as a catalyst for economic growth, OneRoof reported.
Local impact and global comparison
Agents like Hamish Walker (pictured above center) of Walker & Co highlighted the positive local contributions of overseas buyers in areas like Queenstown, where they support community causes generously.
In contrast, countries like Dubai attract foreign buyers with incentives such as 10-year visas, a strategy New Zealand could consider to enhance its appeal.
Market perspectives on foreign investment
Despite the potential policy shift, CoreLogic chief economist Kelvin Davidson (pictured above right) remains cautious about the overall market impact.
“We think the market this year will be pretty subdued. If the foreign buyer ban was relaxed, it’s not going to change that view,” Davidson said, suggesting that any relaxation is unlikely to transform the market dramatically but might increase demand in specific sectors.
The ongoing debate and developments will be closely watched by market participants and policymakers alike, as any decision could have far-reaching effects on New Zealand's property market and broader economy.