The Impact of the Active Investor Plus Program on New Zealand's Luxury Real Estate Market

New Zealand Landscape

Understanding the Active Investor Plus Program

Since the relaunch of the Active Investor Plus (AIP) program last April, the New Zealand government has received around 200 residency permit applications, as reported by the country's Immigration Service. Most applicants are high-net-worth individuals from the US, China, and Hong Kong. Although investing in residential property is not a program requirement, those who obtain one of these "golden visas" can purchase a home for personal use. Experts believe this will boost investment in luxury residential properties.

Changes in Foreign Property Purchases

The Wellington government restricted foreign property purchases in 2018 to "prevent speculation and keep housing prices affordable." Prior to this program, only Australian and Singaporean citizens could purchase homes in the country.

Investment Options Under the AIP Program

The AIP program now provides two investment options. A minimum of approximately $3 million (€2.56 million) must be invested in New Zealand companies or managed funds over three years. This option requires just 21 days of presence in the country. The other option involves a larger investment of $6 million (€5.12 million) over five years, with a requirement of 105 days of residence.

Selected individuals will have the right to live, work, and study in New Zealand, with access to permanent residency. “Our experience indicates these are high-net-worth individuals,” said Dominic Jones, CEO of Greener Pastures. “They are drawn to the New Zealand lifestyle and our relaxed approach to life, seeking to relocate permanently with their families,” Jones explained.

The Impact on New Zealand's Luxury Housing Market

“The arrival of high-net-worth individuals will significantly impact New Zealand's relatively small luxury housing market,” adds Kashif Ansari, founder and CEO of the real estate group Juwai IQI. “They will purchase homes in prime residential areas and land for large estates.”

According to British consultancy Henley & Partners, New Zealand has the seventh most popular immigration program globally this year, with half of the applicants from the US and about a third from China. In terms of visa inquiries, New Zealand ranks 16th, with US citizens showing the most interest, the firm stated. In 2024, the program saw a 151% increase in inquiries and "is on track to maintain this high level this year, or even surpass it," Henley noted.

Increased Luxury Transactions

Typically, there are between 10 and 30 deals closing above NZ$10 million (approximately €5.1 million). With the influx of these foreign investors, this number could rise by up to 25 more luxury transactions annually.

"We anticipate the impact will resemble that of the visa program in Australia," Ansari stated. "Home purchases will be restricted to rural estates and homes in prime neighborhoods near top schools and amenities. The mid-market and other areas will remain unaffected. We expect a targeted and limited impact," he added.

Areas of Interest for Investors

The Auckland Port area will garner the most interest, followed at some distance by Wellington and Queenstown. "Buyers' objectives will vary based on their net worth and country of origin," he added.

The Appeal of New Zealand

Although New Zealand offers excellent safety, education, and healthcare, along with a pleasant environment, its geographical remoteness is the biggest drawback for wealthier families. Despite high standards in safety, education, healthcare, and climate, markets like Switzerland, Monaco, the United Arab Emirates, and the United States are more appealing to families with school-aged children.

Conclusion

The Active Investor Plus program is set to reshape New Zealand's luxury real estate market. With high-net-worth individuals looking to invest, the demand for luxury properties is expected to rise. As these investors seek to establish roots in New Zealand, the landscape of the housing market will change, creating new opportunities and challenges.

For those considering this investment route, understanding the implications and potential benefits is crucial. The AIP program not only opens doors to residency but also offers a chance to be part of New Zealand's vibrant lifestyle.