Christopher Luxon puts investment property on the market

Thursday, 1 August 2024

Prime Minister Christopher Luxon has found success in a very Kiwi investment strategy: buying rental properties.

But now he’s moving to sell one long-held Onehunga home, and with the sale he’s poised to benefit from years of market gains and a possible $350,000 payday.

The well-maintained, 96sq metre Grey St house has two-bedrooms, one-bathroom, is healthy homes standard compliant and has a kitchen described by the real estate agent as “modern”. It’s one of three such houses Luxon owns at the same address on the Onehunga street as an investment.

The listing went on the market last week, and a deadline sale has been set for next week, on August 6.

Luxon bought the home in 2015 for $650,000, and Homes.co.nz estimated its current market value could be $1.07 million - which could mean a $350,000 capital gain, if that price was obtained.

There will be no mortgage to settle with the sale. According to public disclosures, Luxon has no mortgages on any of his seven properties.

Luxon declined to comment on the sale this week. “The management of the Luxons’ properties are private matters which are unrelated to Mr Luxon’s capacity as prime minister,” said a spokesperson for the prime minister, in a statement.

Ed McKnight, economist at Opes Partners, a firm which helps people become property investors, said Luxon’s sale suggests he has found a better use for his money.

“The market is actually pretty rubbish at the moment, and so I'm quite surprised to hear that Christopher Luxon is selling one of his properties,” he said.

“A number of investors, especially ones who have a number of properties and quite large mortgages are saying, I need to sell my property now, because I'm really struggling with these high interest rates.

“But the prime minister, if he doesn't have any mortgage or debt on those properties, he shouldn't have those cash flow concerns.”

McKnight said it was actually “quite strange” for someone to invest in multiple properties next to each other, because “you miss out on a lot of diversification”.

Luxon also owns a Remuera home, a Waiheke Island property, an apartment near the Beehive in Wellington, and his Botany electorate office which he charged Parliament $3,750 in monthly rent for, as allowed for under its rules.

In addition, the prime minister owns the three Onehunga properties as investments. The two that were not for sale were bought in 2015, for $620,500, and in 2018, for $810,000.

According to undated real estate listings online, these properties are rented for $530 a week and $650 a week.

Any sale of the property bought in 2018 would have attracted tax under the former brightline test changed by the Government at the start of July.

McKnight said it was probably a good move for Luxon not to sell the home which just came out of the brightline test, as this would attract comments his Government’s rule change was “self-serving”.

“I wonder whether he's strategically not selling the one that would have previously attracted brightline.”

Luxon also declares an interest in a family trust, as with many MPs. But unlike some of his colleagues, he declares no shareholdings in companies or funds.

The prime minister also has four retirement schemes: Westpac KiwiSaver, AMP KiwiSaver, Australian Retirement Trust Super Savings, and a Unicare Savings Plan.

Correction: It was previously reported Luxon purchased the property for sale in 2007 for $373,000, meaning a potential capital gain of $697,000, according to property sales records. These records were incorrect, Luxon purchased the property in 2015 for $650,000. (Monday, August 5, 2024, at 9:00am). The error is regretted.