Unlocking New Zealand's Potential: Why Now is the Time to Reconsider Foreign Land Ownership.

As I took our fast-ageing labrador Flo for a quick winter blast of fresh air in the jet boat up her favourite local river, enjoying the stunning Canterbury farmland and majestic mountains, the recent talk about who can own what in this country was really on my mind. Flo wasn’t much of a sounding board, but I concluded that New Zealand is missing a significant opportunity. With the government Budget reading fast approaching, undoubtedly focused on economic revitalisation, productivity gains, infrastructure development and innovation, as well as the staples of education and health, isn’t it time to fundamentally reassess how we welcome offshore investors? I don’t so much mean the sovereign funds, but the successful individuals and families who not only seek a place to invest but also desire a true connection – a place to call home when they visit – which could profoundly benefit our nation's growth and prosperity.

Since its implementation in 2018, the foreign buyer ban has hindered New Zealand's ability to fully leverage its global appeal. Much like the demand from high net worth global travellers for our tourism experiences, there is an equally clear and consistent demand from offshore buyers for top-tier properties. We see both on and off-market interest in properties well beyond NZ$5 million, with recent high water marks exceeding $40 million in Auckland and Queenstown. But at present foreigners cannot participate. 

This demand as might be expected, extends beyond urban residential homes in the leafy suburbs of our largest cities to highly desirable lifestyle properties and even farmland – often classified as sensitive land in New Zealand. Imagine lakeside homes, properties with breathtaking alpine vistas, and all the unique attributes that command a premium. These are the assets that truly resonate with those seeking to immerse themselves in the New Zealand way of life, often inspired by prior visits or interactions with our distinctively laconic Kiwi culture, combined with the relative safe haven that New Zealand offers. Critically, offshore residents who owned property in New Zealand before 2018 have, with rare exceptions, contributed significantly more to their local communities than they have extracted. In many cases, they have proven to be superior custodians of the land than even asset rich but cash-strapped generational farmers or our own conservation authorities, actively maintaining and improving existing biodiversity for the benefit of generations to come.

While the recently upgraded Investor Plus visa has certainly generated increased interest, marked by a rise in new applications and substantial committed funds, the current policy presents a striking irony. We actively encourage global investors to make significant financial commitments to New Zealand, yet simultaneously tell them they cannot establish meaningful, long-term roots here through property ownership, at least not for a number of years.

This irony discourages the very foreign capital we need, and more importantly, it prevents that capital from becoming deeply embedded within our economy over the long term. As a small trading nation, our economic pulse and collective quality of life are intrinsically linked to foreign exchange and the inflow of capital. As many have said, we can only sell to ourselves so often. Denying global investors the ability to purchase the one asset they most desire – property to truly enjoy – is a tangible and self-imposed barrier to our growth. Offshore capital ‘living’ in our economy for generations would be incredibly helpful to our prospects.

It’s important to recognise that buyers in this high-end market segment are not competing with first-home buyers or even the 'average Kiwi family', however that might be defined today. Instead, they are competing with the very few most highly successful New Zealanders, or those from exempt markets like Australia or Singapore, who still face some size restrictions. The notion that foreign buyers inflate prices for typical New Zealanders seeking their first or family home simply does not apply to this market segment. With the average residential house price in New Zealand just over $900,000 and lifestyle properties around $980,000, these are not the same buyers. By setting a property price threshold sufficiently high, perhaps to exclude 99.5% of Kiwis, this specific concern could be effectively mitigated. Such a policy might only involve a handful of transactions – perhaps 50 per year – at those elevated price points.

Furthermore, our experience shows that foreign buyers are highly reliant on local advisors and suppliers. This directly translates into jobs and revenue across a broad spectrum of New Zealand businesses: real estate agents, lawyers, property managers, tradespeople, and numerous local service providers. Relaxing the foreign ownership ban within this specific segment would not only attract much-needed capital but also significantly stimulate local economies across various sectors and rural regions throughout the country.

Now is the opportune moment for the New Zealand government to reconsider its stance on foreign land ownership. As a starting point, consider a mechanism where, for example, twice the value of the purchased property must be invested in revenue-generating and taxable initiatives within New Zealand. A $10 million home might allow an additional $20 million investment in productive pastoral farmland or tourism ventures. Similarly, a $6 million lifestyle block could introduce a $12 million investment into high-tech opportunities helping take the best of New Zealand’s innovation to global markets. While this approach is admittedly simplistic, it opens the door to crucial conversations. Naturally, there will be many considerations: the application and implications of taxation, asset holding periods, necessary controls, and regulatory frameworks. But these are precisely the discussions we need to have. Where there is a will, there is a way. If New Zealand truly aspires to be considered alongside other active global jurisdictions that are successfully attracting foreign investment, then as a country, we must demonstrate a serious commitment to engaging with HNW global investors and opening the door a little more than it is today.

By embracing a more open, yet strategically structured, approach – particularly for those passionate about New Zealand's unique lifestyle and willing to invest significantly – we can unlock new avenues for economic growth, foster deeper international connections, and genuinely leverage our global appeal for the enduring benefit of all New Zealanders.

I wait in hope. In the meantime, Flo just looks forward to some more sunshine, plenty of tummy rubs and hopefully more trips up the river.