Why New Zealand Is Becoming The Next Hot Property Investment Spot

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Why New Zealand Is Becoming The Next Hot Property Investment Spot
A view of the living room, which looks out to scenic sights of Jack’s Point, located just 15 minutes from Queenstown, New Zealand. (Photo: New Zealand Sotheby’s International Realty)

By Sandhya Mahadevan

June 15, 2021

Its effective handling of the pandemic and quick economic recovery is driving even more real estate investors to New Zealand shores

Rolling hills, soaring peaks, lush countryside, impossibly azure waters—cliched as these descriptions may sound, these are parts of New Zealand’s landscape that have fit the plots of the greatest fantasy and period-action films and TV series made in the past two decades. Be it the Lord of the Rings movie trilogy or the new post-apocalyptic Netflix series Sweet Tooth, its natural beauty has enthralled many.

These have put the country on the bucket list of tourists as well as long-term settlers—the country has one of the highest populations of foreign-born citizens—including billionaires PayPal co-founder Peter Thiel and Linkedin’s Reid Hoffman. The country’s historically low-interest rates have played a big part as well.

Now, with the way the country’s economy has rebounded from the pandemic, it seems to be ticking a lot more boxes for property investors.

See also: The World’s 10 Most Liveable Cities For 2021

 

A photo of Lake Wanaka, in Otago, New Zealand. Photo: Hannah Wright on Unsplash
A photo of Lake Wanaka, in Otago, New Zealand. Photo: Hannah Wright on Unsplash

New Zealand and Australia are appealing to European investors given their much smaller population and tighter border control, says Dominic Volek, group head of private clients of Henley & Partners.

“Where someone chooses to migrate to can depend on a number of factors, and our recent research, which ranks countries that host residence- and citizenship-by-investment programs, found that those with the capacity to provide access to health security ranked high,” he says. New Zealand, along with Australia, were both ranked highest in terms of health management and risk readiness.

The two countries joined Singapore in the recent Bloomberg Covid resilience ranking as the top three countries able to provide residents “a pre-pandemic quality of life”—with the exception of international travel.

See also: 7 Hong Kong Apartment Buildings With The Best Views In The City

With all this turmoil that has been going on around the world, places like New Zealand will continue to be popular. It will maintain its potential for long-term property investments.

— Mark Harris, co-founder and managing director of New Zealand Sotheby’s International Realty

A view from Queenstown Hill of Queenstown, New Zealand. Photo: Ömer Faruk Bekdemir on Unsplash
A view from Queenstown Hill of Queenstown, New Zealand. Photo: Ömer Faruk Bekdemir on Unsplash

“New Zealand’s handling of the pandemic, its rapid economic recovery, low-interest rate environment, limited supply of quality stock and sustained lack of travel, coupled with an increase in the number of Kiwis living abroad returning home, has underpinned demand for residential property,” says Nicholas Keong, head of residential international project marketing at Knight Frank Singapore.

So much so that, that its government had to initiate stricter real estate laws against overseas investors to avoid an asset bubble. This includes recent add-on policies of cutting off tax incentives for overseas investors and unlocking more land to increase the housing supply. “It is virtually impossible now for investors from the UK, US or China, among others, to buy a residential property in New Zealand,” says Mark Harris, co-founder and managing director of New Zealand Sotheby’s International Realty.

“There will be some levelling off of the overall market with these new real estate policies by the government, but I think with all this turmoil that has been going on around the world, places like New Zealand will continue to be popular. It will maintain its potential for long-term property investments.”

See also: Singapore Shophouses Are In High Demand For Investors–Here’s Why

The crown jewel of Civic Quarter in Auckland, The CAB sits in a culturally rich precinct alongside Auckland Town Hall and Theatre District and is within an 11-minute walk to The University of Auckland. Image: Knight Frank
The crown jewel of Civic Quarter in Auckland, The CAB sits in a culturally rich precinct alongside Auckland Town Hall and Theatre District and is within an 11-minute walk to The University of Auckland. Image: Knight Frank

The good news for Singaporean and Australian investors is “that the deal excludes Singaporean, and Australian, citizens—thanks to trade agreements between the countries—so it’s a quite big advantage in terms of monitoring and purchasing in New Zealand’s residential market”, says Harris. “Singaporeans and Australians will still need to put in an investor-category migration application if they want to buy a property that exceeds five hectares or if it is sensitive land.”

“At the moment, there is a flow of return capital from New Zealanders living overseas, as well as selective interest from HNW (high-nett-worth) individuals attracted to New Zealand’s amazing beauty and lifestyle,” says Tammy Fahmi, vice president of global operations and international servicing at Sotheby’s International Realty.

Here, we list the regions in New Zealand that are creating the most buzz for property investors:

Yachts on Hauraki Gulf, pictured against the Auckland skyline. Photo: Matthew Buchanan on Unsplash
Yachts on Hauraki Gulf, pictured against the Auckland skyline. Photo: Matthew Buchanan on Unsplash

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