New Zealand relaxes foreign property ban for wealthy investors

New Zealand is set to loosen restrictions on foreign property ownership, which were implemented in 2018 to mitigate housing market inflation exacerbated by foreign speculation. Prime Minister Christopher Luxon announced that only a select number of foreign investors with 'golden visas' will now be able to purchase single residential properties worth at least 5 million NZD (approximately 3 million USD). The move aims to attract wealth to stimulate the nation’s economy while attempting to balance ongoing concerns about housing affordability among locals. Some politicians, however, argue this change could further disadvantage first-time home buyers and exacerbate existing challenges in the housing market. This policy shift marks a significant change from the previous government's strict regulations and is a response to call for more foreign investment to boost economic growth. It allows easier entry into the real estate market for high-net-worth individuals, particularly appealing as New Zealand presents itself as a desirable and stable location amidst global volatility. The golden visa program, reintroduced in April 2023, offers permanent residency to applicants, enhancing its appeal. In the recent surge for golden visas, 189 applications were submitted within three months, a stark increase compared to previous years when only 116 applications were submitted over two and a half years. With approximately 40% of the applications coming from the United States and a considerable amount mentioned to be expected from other countries like China, the government sees this as an opportunity to leverage foreign investments to potentially contribute around NZ $1.8 billion. The general sentiment is that although the initiative could feed the economy, it risks inflating housing prices further, which could create more barriers for New Zealanders. Political responses have been polarized. Supporters of the bill highlight the need for foreign capital and the economic boost it could provide, while opponents emphasize the inequality it could perpetuate in the housing market. Critics suggest it threatens the dream of home ownership for ordinary New Zealanders, raising questions about the social consequences of catering to the wealthy investor class over local citizens seeking affordable homes.