Cover This house in Jack's Point in Otago is designed by award-winning practice Mason and Wales, with spectacular lake and mountain views. Photo: New Zealand Sotheby’s International Realty

Its effective handling of the pandemic and quick economic recovery is driving even more investors to New Zealand shores

Rolling hills, soaring peaks, lush countryside, impossibly azure waters—cliched as these descriptions may sound, these are parts of New Zealand’s landscape that have fit the plots of the greatest fantasy and period-action films and TV series made in the past two decades. Be it the Lord of the Rings movie trilogy or the new post-apocalyptic Netflix series Sweet Tooth, its natural beauty has enthralled many.

These have put the country on the bucket list of tourists as well as long-term settlers—the country has one of the highest populations of foreign-born citizens—including billionaires the likes of PayPal co-founder Peter Thiel and Linkedin’s Reid Hoffman. The country’s historically low-interest rates have played a big part as well.

Now, with the way the country’s economy has rebounded from the pandemic, it seems to be ticking a lot more boxes for property investors.

New Zealand and Australia have been appealing to European investors given their much smaller population and tighter border control, says Dominic Volek, group head of private clients of Henley & Partners.

“Where someone chooses to migrate to can depend on a number of factors, and our recent research, which ranks countries that host residence- and citizenship-by-investment programs, found that those with the capacity to provide access to health security ranked high,” he says. New Zealand, along with Australia, were ranked highest in terms of health management and risk readiness.

The two countries joined Singapore in the recent Bloomberg Covid resilience ranking as the top three countries able to provide its residents “a pre-pandemic quality of life”—with the exception of international travel.

See also: Property Trends: Why Singapore, Japan, Australia and New Zealand Rank High on Buyers’ Lists

“New Zealand’s handling of the pandemic, its rapid economic recovery, low-interest rate environment, limited supply of quality stock and sustained lack of travel, coupled with an increase in number of Kiwis living abroad returning home, has underpinned demand for residential property,” says Nicholas Keong, head of residential international project marketing at Knight Frank Singapore.

So much so that, that its government had to initiate stricter real estate laws against overseas investors to avoid an asset bubble. This includes recent add-on policies of cutting off tax incentives for overseas investors and unlocking more land to increase housing supply. “It is virtually impossible now for investors from the UK, US or China, among others, to buy residential property in New Zealand,” says Mark Harris, co-founder and managing director of New Zealand Sotheby's International Realty.

“There will be some levelling off of the overall market with these new real estate policies by the government, but I think with all this turmoil that has been going on around the world, places like New Zealand will continue to be popular. It will maintain its potential for long-term property investments.”

See also: How The Singapore Property Market is Responding to Buyers’ Need For Personal Space

But the good news for Singaporean investors is “that the deal excludes Singaporean, and Australian, citizens—thanks to trade agreements between the countries—so it’s a quite big advantage in terms of monitoring and purchasing in New Zealand’s residential market”, says Harris. “Singaporeans and Australians will still need to put in an investor-category migration application if they want to buy a property that exceeds five hectares or if it is sensitive land.”

“At the moment, there is a flow of return capital from New Zealanders living overseas, as well as selective interest from HNW (high-nett-worth) individuals attracted to New Zealand’s amazing beauty and lifestyle,” says Tammy Fahmi, vice president of global operations and international servicing at Sotheby’s International Realty.

Singaporeans’ affinity for this oceanic country is well known—add to its high-quality tertiary education facilities—so there has always been quite a bit of interest out of them in New Zealand properties, say Fahmi and Harris, and the enquiry levels have only increased since the Covid-19 pandemic began.

Here, we list the regions in New Zealand that are creating the most buzz for property investors:

1. Auckland

The North-Island city is New Zealand’s most populous city—one-third of the country’s population lives here. It also recently topped the Global Liveability Index as the city that has been providing the best living conditions amidst the Covid-19 pandemic so far.

“Auckland is a key gateway and economic centre for business, world-class education, and a multi-cultural hub of food, music, arts and entertainment, solidifying itself as one of the most popular destinations for both locals and foreigners,” says Keong.

Auckland appeals in equal measures to people looking for lifestyle offerings and a respite from busy city life, including yachting excursions in Waiheke Island, which is about a 45-minute boat ride from Auckland CBD. “It’s a small island with beaches, vineyards and has plenty of land available. With work-from-home becoming a norm, it’s been extremely popular in the last six months with people who want a quiet place to work out of, but also be close to the city and the ocean,” says Harris.

With its appeal having increased in the post-pandemic new-normal, Auckland’s median home prices increased by 22 per cent through April 2021, from NZ$925,000 to NZ$1.125 million (approximately S$875,726 to S$1.06 million)—a record level for Auckland, says Fahmi.

2. Otago

The Otago region in South Island has always been popular with tourists for its viniculture—but the region’s resort towns such as Queenstown and Wanaka have recently seen a growth increase of 58.8 per cent in its property market as well, says Fahmi.

“The Queenstown Lakes district in Otago is especially appealing to those looking to make lifestyle investments with its golf courses, ski fields, vineyards, as well as rivers that offer fly fishing,” says Harris. New Zealand Sotheby’s has closed quite a few deals with Singaporeans in that part of the country due to its offerings.

3. Wellington

The Real Estate Institute of New Zealand reported that the median house prices in New Zealand’s breezy capital went up 35 per cent for the financial year that ended February 2021. The city’s stable economic environment and potential for employment and high income will continue to keep it on the radar of property investors.

Besides these, it has Weta Cave, a pilgrimage site for film buffs and fans of The Lord of the Rings movie series. The scenic Kapiti Coast is a short drive to the northwest, and for fans of pinot noir, Martinborough is within range to the northeast, says Fahmi.

4. Nelson

Situated at the northern tip of the South Island on the eastern shores of Tasman Bay, Nelson is a short ride away from Abel Tasman National Park, and is also home to popular lifestyle attractions such as Nelson Classic Car Museum and WOW (World of Wearable Art) Design Competition.

All these above aspects, aided by record-low interest rates saw increased national migration into the city, which pushed its median home prices up by 15.1 per cent year on year, says Fahmi. “New Zealand Sotheby’s recently sold a 520-ha private island northeast of Nelson, right off the coast from Cable Bay,” she adds.

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