Foreigners' interest in buying New Zealand assets was as strong as ever, despite Overseas Investment Office data showing a decline this year, an expert says.

Greg Knowles, a KMPG tax deal advisory partner, agreed the numbers from January to March showed a fall but that did not reflect the reality and three months was too short a time period to draw any major conclusions.

"Interest in New Zealand is as strong as it has ever been," he said.

"There's been no drop-off. The market is very healthy which is a pleasant surprise," Knowles said.

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A ministerial directive from new Government ministers late last year announced a regime change but Knowles said the OIO was not declining applications.

OIO data shows approval numbers dropped from 23 between January and March last year to 13 in the first three months of this year. Net investment also fell from $1.3 billion last year to $493 million this year.

But Knowles said it would be wrong to think that showed investors' appetite for New Zealand had wained.

On November 28, Associate Finance Minister David Parker and Land Information Minister Eugenie Sage indicated that from December 15, restrictions on foreigners buying large tracts of New Zealand farmland would soon apply to virtually all New Zealand farmland, replacing a more lenient previous regime.

It was a privilege for overseas buyers to buy rural New Zealand land and Sage said the existing directive was weak and undermined the criteria in the Overseas Investment Act. It effectively opened the door to rubberstamp overseas purchases of farms up to 10 times the average size, meaning it only applied to sheep and beef farms of more than 7146ha, or a dairy farm more than 1987ha.

That ministerial directive was in advance of the Government's planned Overseas Investment Amendment Act which will ban foreigners buying New Zealand houses and lifestyle properties. The new law is yet to be passed.

Lee Bell's proposed purchase of Icebreaker Holdings for $272 million is one of the largest deals approved this year. Picture / NZME
Lee Bell's proposed purchase of Icebreaker Holdings for $272 million is one of the largest deals approved this year. Picture / NZME

Graham Wall, the real estate agent who sold New Zealand's most expensive residential property for $39m in 2013, said he had noticed a change in buyer interest but this country remained extremely attractive.

The largest deals approved this year are:

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• Lee Bell Inc's proposed purchase of Icebreaker Holdings for $272m;

• Volution Group's proposed purchase of Simix for $72m;

• CITIC Capital China Partner's proposed purchase of Trilogy International Limited for $63.3m.

The OIO said Lee Bell, 93.4 per cent United States owned, had consent to buy the merino products business. Volution, 70 per cent United Kingdom-owned, can buy the electrical and ventilation product distributor. CITIC, 43.8 per cent foreign-owned and 12.6 per cent Chinese-owned, got consent to buy the fragrance, body care and natural products business.

Those three biggest deals were all for applications released by the OIO at the end of April for March.

Justin Ensor, a KPMG partner and deal advisory chief, last year said this country needed foreign investment.

"New Zealand needs foreign capital to operate. If the impact of reforms is to cut off the flow of capital - particularly out of Australia into New Zealand - that could dampen this economy to some degree. We would then be more reliant on domestically raised capital. Economic growth relies on talent which is entrepreneurs, combined with capital which creates jobs," he said late last year.

Knowles said foreign interest was coming mainly from Australia and the United States.

Murray Horton of the Campaign Against Foreign Control of Aotearoa (CAFCA) says the new Government has had an effect and "the brakes have done on the foreign land grab".

Horton said after the ministerial directive that several months of data was available to assess the effect of this policy which was working.

Few applications now involve farm land, he said, so the Government move was effective.

"CAFCA is pleased that, for the first time in years, prime New Zealand farm land is not being routinely approved for sale to foreign buyers, whether individuals or corporations," Horton said.