This Australian owns seven NZ rental units; Why he’d rather buy here than back home

Friday, 10 July 2026

Australian investor Kaveen Jayawardena says his success with solid rental returns have him buying across the Tasman instead of back home.

Property advisers say more Australians are enquiring about New Zealand, with an uptick in interest.

But tax experts warn them off doing it for tax reasons alone, with some are chasing a benefit that doesn't actually exist.

When Australian healthcare IT professional Kaveen Jayawardena bought his first New Zealand property in 2018, he wasn't planning to build a portfolio across the Tasman.

Now, at 37, he owns seven rental units here and says he'll keep buying whenever the opportunity arises; 'I love bad news in the market,' he says. 'You stay away, I'll buy them more.'

Jayawardena's confidence comes as some property professionals report growing interest from Australian investors looking across the Tasman, attracted by lower purchase prices and, in some cases, stronger rental returns than they're finding at home.

Ilse Wolfe, who helps overseas investors like Jayawardena buy and renovate New Zealand rental property to drive the value up, says she now has 'twice, if not three times' the number of international clients she had a year ago. Outside Kiwi expatriates, Australians make up the biggest group.

She says the increase began well before Australia's recent tax changes.

'The comment that I get frequently from their (Australian clients') mortgage advisers is that they think they're getting so much more value by investing here,' she says.

'Not only is there not that $40,000 or $50,000 stamp duty on top, but when they convert their dollars into Kiwi dollars, they get such a great feeling that it's going further.'

Most of her Australian clients never even see the properties they buy.

'The keen ones might fly over at the end of the renovation to hang the curtains,' she jokes, before handing the keys to a property manager.

But Mike Reddy, who is a principal of NZ tax and runs a company which advises Australians investing in New Zealand, cautions Australians investing here need to make sure they understand the tax rules first.

He says recent changes in Australia requiring property investors to pay more tax has prompted a rush of inquiries from Australians setting up New Zealand companies or trusts, after hearing there is no comprehensive capital gains tax here and that mortgage interest remains deductible, unlike in Australia.

'We've had about 20 or 30 people calling us every week trying to set up a New Zealand company. Other people have just gone off and done it, so that number may be the tip of the iceberg.

'I tell them it's not going to work. Some of them have been quite indignant with us. Some of them have already set it all up and now they're running into problems.

'They still have to do a tax return in Australia based on Australian tax rules.

'They were assuming they'd get taxed on New Zealand rules - well that's not true… it's a fallacy, it's a knee-jerk reaction. It was crap.“

Australian residents are generally taxed on their worldwide income and capital gains, meaning buying property in New Zealand doesn't exempt them.

'They're still going to end up in the same tax position if they bought the property in the Gold Coast or Auckland,“ adds Reddy.

'It doesn't matter where the company is created, what matters is where it's controlled from and that's the residency situation of the directors.'

That means the growing interest appears to be driven by more than tax alone.

Cotality Australia's head of research Tim Lawless says Australian investors were already facing a tougher market before the recent changes, and that could be leading them to consider New Zealand.

'I think property is looking quite unattractive here in Australia, given mainly cyclical factors,' he says.

Property prices are starting to fall in Australia, even before the recent tax changes, so there’s not as much change of a capital gain anytime soon.

'I think it's probably motivating people to think about looking at New Zealand.'

The difference in rental returns is relatively modest; latest Cotality figures show average gross rental yields are only 0.2 percentage points higher in New Zealand than Australia.

'But no one is really buying the average,' says Cotality chief property economist Kelvin Davidson.

'Yields are higher in some situations.'

For Jayawardena, though, the attraction of New Zealand came from the numbers he saw after taking a chance on his first investment here.

Although he'd already invested in Australian property, he bought a house in Whanganui in 2018 for $150,000.

After spending about $25,000 renovating it, he sold it five years later for $410,000 after waiting out the bright-line period at the time.

That convinced him to keep investing here.

His next purchase was three units, each with two bedrooms, in New Plymouth, bought off-market for about $700,000.

He says he spent about $172,000 replacing roofs, fencing and making the homes healthy to live in.

Weekly rents rose from about $250 per unit to about $530.

His latest purchase was a four-unit property also in New Plymouth, bought for about $820,000.

He says he has since spent around $250,000 renovating it, lifting rents from about $350 a week to about $530.

His next goal is to separate the units onto individual titles, creating more equity to fund further purchases.

He says earning an Australian IT salary has made borrowing straightforward. 'The banks love it,' he says.

There has also been debate among investors about whether a future New Zealand government could change landlord tax settings. Changes that, according to Reddy, Australians buying here wouldn’t be able to avoid.

Jayawardena says that isn't what drives his decisions.

'If you worry about tax, it could be short term. Governments can change…I'll buy more when I can.'