Here’s how digital nomads could affect the rental market

Thursday, 30 January 2025

People who work remotely while travelling are now welcome in New Zealand, the government has announced.

What do you think? Have your say in the comments section.

New Zealand has thrown out the welcome mat to digital nomads, but could a sudden influx of long-term tourists spell disaster for the stretched rental market?

All people travelling in New Zealand on a visitor’s visa would now be able to work remotely for a foreign employer .

If the ability to work remotely got more people visiting the regions, and places like Queenstown and Wanaka for longer, the concept should be embraced, Kiwibank chief economist Jarrod Kerr said.

Government relaxes visa rules to attract 'digital nomads'

“New Zealand is a beautiful country with a stable political background, and technical infrastructure that means people can plug in their laptop in, and work from pretty much anywhere here. That’s attractive to digital nomads.”

There were lots of properties on short-term rental platforms, such as Airbnb, and a digital nomad was likely to pick that sort of property, Kerr said.

“A big increase in digital nomads wanting short-term rentals could impact on the supply of long-term rentals if lots of people switched their properties over.”

Developers were not silly, and would build in anticipation of that sort of demand if there was a big pick up in visitor arrivals, he said

“But we are short tens of thousands of homes. So if loads of digital nomads arrived all at once, it would put further stress on a market that is already short, and could impact on rents.”

Under the new rules, digital nomads can stay in New Zealand for up to nine months by extending their visitor visas after they arrived, and their work will be untaxed in New Zealand if they stayed for less than 92 days.

Kiwibank’s Jarrod Kerr believes New Zealand is a great destination for digital nomads.

But there might be tax implications for visitors who stayed longer, and people coming for short-term work, such as sales people and performers, still have to obtain the relevant work visa.

More than 50 countries worldwide offer a digital nomad visa in a bid to attract some of the 40 to 63 million people estimated to be able to work remotely.

Tourism Minister Louise Upston, who made the announcement on Monday along with Finance Minister Nicola Willis and Immigration Minister Erica Stanford, said it was necessary to keep pace to ensure New Zealand was an attractive destination for people wanting to “workcation” abroad.

“Compared to other kinds of visitors, international remote workers have the potential to spend more time and money in New Zealand, including during the shoulder season.”

Queenstown is likely to be an attractive location for digital nomads coming to New Zealand.

But there are some who doubt the relaxation of the rules will be enough to tempt nomads away from other locations.

Countries, such as Thailand and Portugal, offer tax benefits and a path to residency, while others, such as Costa Rica and Brazil, were well-established hubs for digital nomads.

Andrew Murray, chief executive of Apartment Specialists and a landlord, was one of the doubters. He did not think the “changes” would lead to an influx of digital nomads flooding the rental market.

Not only were there no tax advantages on offer, but it was significantly cheaper to live in many other places, and that would disadvantage New Zealand as a choice for many digital nomads, he said.

“They might choose to go somewhere like Queenstown or Wanaka for the winter season and the experiences, and swallow the costs. They would have to be earning pretty good money though.

“But why would they choose to go to a city such as Auckland when it is so expensive, and doesn’t have anything that distinguishes it from other big cities?”

If there was an increase in digital nomads, it might have an impact on the Airbnb market, but not the long-term rental market, Murray said.

“Most landlords want tenants for at least a 12-month lease. They don’t want to rent to travellers who are here for nine months or under. They want certainty, especially if the market is weaker.”

The rental market was looking slightly weaker this year as the high numbers of people leaving the country meant there was more stock on the market, he said.

Auckland Property Investors Association general manager Sarina Gibbon said in theory any impact would come down to the age-old question of supply and demand.

If the demand for rental accommodation increased, it would lower the supply of it, and less supply meant more competition which made for higher rents, she said.

“That’s in theory, but experience on the ground suggests that the dominant age of digital nomads is the 20s, and that’s an age group that usually travels for experience and is not as focused on assets.

“Rather than going into long-term rental tenancy agreements, they are far more likely to move into house share and flatting situations where there is a head tenant already.”

In Auckland at least, more digital nomads would not have a significant impact on the supply of long-term rentals, and access to housing, Gibbon said.

“They might have an impact on the number of people living in flatting situations, and that is something property managers and landlords might need to keep an eye on, if they have a preference around occupant numbers.”