The gold rush is over
If you were to ask people where they want to live, the list is likely to look something like this:
- Safe
- Peaceful
- Prosperous
- Clean land, air and water
- Culturally similar, or at least culturally open
- Beautiful
- Uncrowded
New Zealand ticks those boxes almost better than anywhere in the world but the gold rush might be over because New Zealand's government passed a low banning foreigners from buying residential property.
I have been saying for years that New Zealand real estate is the next big bubble. Since 2013, the REINZ house price index has risen to 2700 from 1800, which is a 9.0% annual growth rate.
New Zealand has faced massive real estate inflation in the past 15 years in part due to foreigners buying second homes, especially Chinese looking to acquire safe offshore assets. The ban was an election promise.
The lone exception allows for non-residents to own up to 60 percent of units in large, newly built apartment buildings.
The usual way around these things is to buy via trusts or corporations so it's unclear if this will really make a dent.
