Is Australia’s foreign buyer ban an opportunity for NZ?

Wednesday, 11 June 2025

There are persistent rumours that the Government is set to revisit New Zealand’s foreign buyer ban.

Foreign real estate buyers are no longer welcome in Australia, and that presents an opportunity for New Zealand - if it revisits its own ban, experts say.

Australia’s federal government recently introduced a ban on foreign investors buying existing homes. The ban is currently set to last until March 2027, but it will then be reviewed and could be extended.

In New Zealand, there has been a ban on foreign buyers since 2018, but over the past few months there have been persistent rumours that the coalition Government will soften or remove the ban.

Queen City Law managing director Marcus Beveridge told The Post if New Zealand wanted to show it was “open for business” to foreign investors, it was time to rethink the ban, especially if Australia was now closed.

Global interest in New Zealand had surged following the Government’s reboot of the golden visa scheme earlier this year, with more than 100 visa applications lodged in just six weeks, he said.

The foreign buyer ban sends a contradictory message to overseas investors, Queen City Law’s Marcus Beveridge says.

“That translates to a potential injection of $620 million, according to government data. Over a year that could represent a cash injection of over $10 billion dollars into our economy.

“But while high-value investors are ready to commit capital, there’s one catch - they still can’t buy a home. The foreign buyer ban sends a contradictory message.”

A sensible way forward would be that anyone who successfully obtained a residence visa under the Government’s golden visa scheme would be eligible to buy a family home, without OIO restrictions, he said.

“Prime Minister Luxon was partially right when he said lifting the ban was not the be-all and end-all of attracting investment, but I’d argue it’s a pretty essential part of making relocation viable for investors.”

He was not suggesting reopening the door to speculative buying in the mainstream market, but the National Party’s pre-election proposal to allow foreign buyers to purchase homes over $2m would protect local buyers while welcoming globally mobile capital, he said.

National’s proposal was dropped during the negotiations to form a government, as New Zealand First was opposed to it.

But more recently New Zealand First leader Winston Peters had acknowledged on breakfast radio that allowing foreigners to buy houses over $5m might be acceptable, Beveridge said.

Ultra-high-net-worth clients are keen to buy high-end homes in New Zealand, real estate agent Caleb Paterson says.

“It didn’t happen in the Budget, but we would expect this could become the law over the next few months, and given the flat housing market, who is really going to worry about a few more people buying houses?”

Luxury real estate agent Caleb Paterson said Australia’s new regulations would create a vacuum for foreign buyers which New Zealand was perfectly placed to fill.

But New Zealand was at risk of missing out on billions in foreign investment as uncertainty lingered around changes to residential property rules for overseas buyers, he said.

“International investors are already shifting their focus to countries with clearer pathways like the UAE due to a lack of commitment from the Government.

“We’ve had deals collapse because investors couldn’t buy a home to settle here first. Meanwhile, in places like Dubai, capital is being welcomed and economies are booming because of it.”

He was dealing with ultra-high-net-worth clients from China, Canada, the US and the UK who were ready to move fast if the door was opened to offshore investment in the high-end residential sector, he said.

“They want to invest here not just in homes, but in businesses, developments, the tech sector and other industries but they’re not going to do that while the rules remain unclear.”

A change to the foreign buyer ban would not have a big impact on the housing market, Cotality’s Kelvin Davidson says.

“Canada’s proposed wealth tax and political uncertainty in the US are further accelerating interest in New Zealand as a safe haven, but we need to show we’re open for business before they go elsewhere.”

For Cotality chief property economist Kelvin Davidson, it was odd that if the Government wanted to attract foreign investors it would not allow them to buy a home.

He said he would not be surprised if the current ban was softened at some point, but he did not believe it would have much impact on the housing market.

“It’s academic now, but if there was a change it might encourage a few more rich overseas people to buy homes here.

“But they would be likely to buy high-end homes, so it wouldn’t impact on the average punter, or drive a big real estate boom.”

Independent economic analysis of the National Party’s election proposal had indicated it would not generate the level of the tax revenue claimed by the party, he said.

“And if the threshold was raised from $2m to $5m it would reduce the stock of available property, and the likely tax revenue even further.”

Before the Labour government introduced the ban, the number of foreign buyers involved in property transfers was actually very low, about 1% to 2% of purchases nationwide according to Stats NZ figures, Davidson added.

“It might be easy to get excited about foreign buyers being an issue and impacting on the market, but in fact they never really have been.”