Faced with the recession, New Zealand announces a “middle path” for attracting foreign investors

New Zealand announced on Monday that it will open its real estate market for rich foreigners who invest in local businesses, reversing a previous prohibition with the hope that the new measure will give an impetus to economic growth, reports Reuters.

New Zealand Prime Minister Christopher Luxon said on Monday that investors who get the migrant visa for foreign investors, reintroduced in April, will be able to buy or build a home if it has at least 5 million in neo -Zeeezes (the equivalent of 2.94 million US dollars).

Previously, those who owned the visa, but did not live in New Zealand for at least six months a year, were forbidden to buy properties.

“This change desires a middle way between those who will not open the market for properties owned by foreigners and the desire to attract investors with high wealth, by deepening their connection with our country, to help increase the economy,” Luxon said in a statement sent to the press.

Those who invest in New Zealand will not have to know the local language

The Wellington government hopes that the relaxation of prohibition will make investments here more attractive. The measure is part of the broader efforts to increase the level of foreign investments in the country, to boost an economy that has entered the second half of 2024 and remained weak in the first half of this year.

In April, the authorities relaxed the rules regarding the eligibility for the so-called “gold” visa, officially called “Active Investor Plus” residence visa. The changes included the decrease of the minimum amount needed for the category focused on higher risk investments, from 15 million in $ 5 million to 5 million, and eliminating the requirement of knowledge of English.

The government said that 301 applications were received for this visa and, if all will be approved and implemented, they would mean a potential investment of at least 1.8 billion in the country in the country's economy.

Why did the island country insert restrictions for buying housing

Foreign investments on the New Zealand real estate market have been a source of concern for locals, because they are considered a significant factor in increasing housing prices. In 2018, the Labor government on the left adopted a law that forbid many non-resident foreigners to buy existing homes.

Luxon said that less than 1% of New Zealand homes are worth over 5 million local dollars and that, in his opinion, this change manages to balance both the need to respond to the interests of investors with great wealth and the desire of those who do not want the properties to be owned by foreigners.

Mischa Mannix-Opie, from Greener Pastures-a company specialized in supporting people who want to get residence in New Zealand-said that, although not everyone wants to buy a home in New Zealand, their customers will be delighted to have this option.

“This really strengthens the attractiveness of the offer,” she said, adding that for many people the lifestyle is what attracts them to invest in New Zealand, and the opportunity to buy a house would help them have that lifestyle.