New Zealand eases off ban on foreigners buying houses

New Zealand is easing off its ban on foreigners buying houses.

The South Pacific island nation is hoping a capital injection via wealthy foreigners will perk up its sluggish economy, Bloomberg reported, but investment opportunities in the country’s luxury real estate sector will only be available to a select few.

For several years New Zealand was on the receiving end of a bizarre housing trend — billionaires buying up massive acreage as a bolt hole against global calamities. In addition to boasting natural beauty, stability and remoteness, the island nation is considered particularly safe from nuclear war.

The recent policy move to welcome back such buyers carves out a careful exception to a 2018 rule that largely banned overseas buyers from the country’s housing market under former Prime Minister Jacinda Ardern. That same year, The Sun reported that handful tech billionaires had already made apocalyptic investments in the country, in case they need to flee California.

Billionaire venture capitalist Peter Thiel, who obtained a Kiwi visa in 2018, was among this jittery bunch.

The Paypal co-founder built a $4.7 million home in Queenstown, complete with a panic room. Thiel tried to build an additional lakeside bunker on a 477-acre estate, complete with a “meditation pod,” but the oddball investor was blocked by local intervention.

Before the ban, foreigners still only made up 2% to 3.5% of the country’s home sales, according to Bloomberg.

Lackluster economic growth since the pandemic has turned New Zealand’s sights back towards holders of its Active Investor Plus visa, otherwise known as the “golden visa.”

Earlier this year the country’s coalition government relaxed rules around its coveted golden visas, a scheme that offers residency to wealthy foreigners who meet certain investment thresholds. Wealthy Americans led the subsequent charge of applications, the Guardian reported. 

Holders of the so-called golden visas will now be permitted to buy houses worth at least $3 million starting at the end of the year.

Economist Kelvin Davidson told Bloomberg that the move “probably won’t do much,” to local home prices.

“For the wider housing market, there’s much bigger restraints in the form of the weak labor market at the moment,” Davidson said.

The country recently logged a two-year low in home prices, the outlet reported, citing sluggish economic growth and rising unemployment.