Overseas investors immediately began hunting for luxury Kiwi homes after hearing whispers some foreign ownership rules were likely to be relaxed, real estate agents say.
Prime Minister Christoper Luxon yesterday revealed foreigners spending $5 million into approved investments in exchange for residency visas would also be able to buy homes worth $5m-plus.
He said the changes aimed to attract rich immigrants to boost the economy, without opening the market to widespread foreign ownership.
Ollie Wall, from Graham Hall Real Estate, said offshore buyers had begun picking up the phone to him weeks back.
In the calls, they briefed him on the type of homes they wanted should the changes come into force, in what he believed signalled the world viewed New Zealand as open for business.
“It’s really good the word is out there that we’re welcoming people in, because we need to,” he said.
The change comes after the then Labour-NZ First coalition banned most foreign buyers in 2017 out of a belief they were contributing to skyrocketing house prices.
NZ First leader Winston Peters and Luxon said yesterday’s change was not about backtracking on the foreign ownership ban.
Most resident visa holders are permitted to buy NZ homes so long as they spend enough time in the country or are tax residents.
But Active Investor Plus residency visa-holders can get their visas while not having to be in New Zealand for six months of each year.
That means some do not “meet the threshold for buying a house under the Overseas Investment Act” as stipulated by the foreign buyer ban, Luxon said.
“The Government has therefore decided that people with an Active Investor Plus residency visa will be allowed to buy or build one home.”
The Government argues the special exemption was necessary to encourage more investors to take up the Golden Visa offer.
“The Government wants to bring additional investment, skills, ideas and connections to New Zealand, and the Active Investor Plus residency visa allows that,” Luxon said.
Bayleys Remuera real estate agent Gary Wallace said it had “made no sense” to ask investors to spend millions to move here, then tell them they were not allowed to buy a home to live in.
“It’s a bit perverse ... asking them to come and be here and invest, but we can’t let them have a home,” he said.
Wall said he’d dealt with lots of wealthy visitors who’d wanted to invest and spend more time in New Zealand.
“But the fact is if you can’t have your own home here, it’s a huge deterrent,” he said.
He said New Zealand, as an economy without many natural resources, relied on the stimulus of foreign investment to boost it.
Wallace said his team was among the most prolific sellers of $5m homes in the country over the past few years.
And while it didn’t expect to be “overrun” by new buyers, the announcement could be “a shot in the arm” for a housing market and economy short on confidence, he said.
Wall said he expected more owners of $5m-plus homes to now put their homes on the market to test the waters.
Luxon estimated there were about 10,000 such homes in the country, while analysts Cotality estimated there were 7000 – or less than 1% of the nation’s stock.
Nick Goodall, property commentator for Cotality, said his team found the majority of the 7000 homes estimated to be worth more than $5m were in Auckland with another 1000 in Queenstown.
That was a small percentage of the market and wasn’t likely to have much overall impact, he said.
He said the impact would likely have been different if the allowed house price was lower.
In the run-up to the last election, the National Party had proposed allowing foreign buyers to buy homes valued at $2m or more.
Goodall said that could have brought a lot of extra demand to the market because there were far more $2m homes.
That could’ve even driven up the price of homes otherwise valued around $1.8m for instance, he said.
“It could actually drag the value of that property up to $2m-ish because if a foreigner wants to buy it, they’re not going to be too worried about an extra couple hundred of grand,” he said.
Michael Rehm, a researcher with the University of Auckland’s Business School, agreed and said the $5m threshold made more sense.
There were a “lot of areas where $2m is not [what] $2m used to be” and a limit that low would have had a much bigger impact on the market, he said.
Wall said rich investors had given back a lot to the country in the past, pointing to recently deceased US billionaire Julian Robertson, who received a New Zealand Order of Merit for services to business and philanthropy.
But there are also few methodical studies done into the financial benefits of golden visa programmes in New Zealand and abroad.
In a 2024 Official Information Act request, the Herald asked how much money successful entrepreneur visa applicants brought into the country over the 20 years since 2005.
The Ministry of Business, Innovation and Employment refused to answer, suggesting it didn’t know.
“To obtain the requested information, Immigration New Zealand staff would need to manually assess thousands of applications and would require a significant amount of effort to identify, retrieve and collate this information,” it said.
“This task would remove staff from their core duties and the greater public interest would not be served.”
2017: The Labour-NZ First coalition Government introduces a widespread ban preventing most non-residents and non-citizens from purchasing residential homes.
Pre-election July 2023: NZ First leader Winston Peters says future coalition partner National’s proposal to allow foreign buyers to purchase $2m homes is too low but signals he would potentially allow them to buy homes with a higher value.
2023 Election Campaign: The National Party campaigns on its policy to introduce a 15% foreign buyer tax for properties valued over $2m.
Post-election 2023: During coalition negotiations, NZ First successfully blocks the National Party’s proposed foreign buyer tax, forcing a return to the drawing board.
Early 2025: The new coalition Government makes changes to the Active Investor Plus Visa, establishing “Growth” and “Balanced” investment categories for applicants.
Late August 2025: Immigration Minister Erica Stanford announces a separate new visa designed to attract foreign businesspeople willing to invest $1m-$2m into existing New Zealand businesses.
September 1, 2025: The Government formally announces the new, targeted exemption, allowing Active Investor Plus visa holders to purchase one home with a minimum value of $5m, while investing another $5m into approved investments.