Why Wealthy Foreigners Are Buying Their Way Into New Zealand

Topic #1:  Good Returns 2nd of September- Mortgage defaults improve while lending rises

Topic #2: Stuff 2nd of September - Housing is no longer NZ's economic heroin. Now what?

Topic #3: The Post 1st of September - Zero growth year: ANZ predicts no house price growth for 2025

Topic #4: Stuff 2nd of September - ‘Safe haven’: Wealthy Americans flock to buy their way into NZ

Topic #5: Ministry of Housing and Urban Development 1st of September - Annual rental price index update

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Transcript

 Hi everyone. I'm Debbie Roberts, owner and financial adviser at Property Apprentice. Join us today for the week in review, where I talk about current events for the everyday investor and home buyer. Our topics for this week with all of the links in the show notes below. Topic number one from Good Returns on the 2nd of September.

 📍 Mortgage defaults improve while lending rises. Topic number two from  📍 Stuff on the 2nd of September. Housing is no longer New Zealand's economic heroine. Now what? Topic number three from  📍 the Post on the 1st of September, zero growth year: a NZ predicts no house price growth for 2025. Topic number four, from  📍 Stuff on the 2nd of September.

Safe haven, wealthy Americans flock to buy their way into New Zealand. And topic number five, from  📍 Ministry of Housing and Urban Development on the 1st of September, annual rental price index Update. 

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So first up for this week in review from good returns on the 2nd of September, mortgage defaults improve while lending rises.

Non-performing housing loans fell by $55 million in July. Marking a 2.2% decline to $2.402 billion. That's the sharpest monthly drop in nearly five years according to the Reserve Bank of New Zealand or RBNZ data. These loans now represent 0.64% of the total $375 billion mortgage book, which is down from 0.66% in June.

Despite the monthly drop non-performing loans were still 17.3% higher year on year. That's up $354 million. The last significant fall occurred in October, 2020 after pandemic driven mortgage growth slowed. Credit Bureau Centrix reported a decline in mortgage arrears from 1.58% to 1.38% in July with 21,200 loans passed due-

400 fewer than June. New mortgage lending rose, 24.4% in the quarter compared to last year, fueled by increased market activity and refinancing for lower rates. Cashback incentives were a major factor with a record $2.6 billion in mortgages, switching lenders in July. About 28.8% of homeowners holding $9 billion in loans changed lenders.

That's a 41.8% increase over the past year. Mortgage advisors attribute most of this to cash back offers. Non-performing loans had surged after the RBNZ began raising the official cash rate in late 2022, reaching $1.5 billion in 2023, up 78.5%, and climbing another 42.6% to $2.1 billion last year. Recently lower interest rates have helped households to stabilize, and with 41% of mortgages still due to roll on to lower rates within the next six months. Further declines in the number of non-performing loans are expected.

Advisors note that unemployment trends will influence how much non-performing loans decrease. Centrix warns that while mortgage indicators are improving, many households remain under pressure. Defaults on vehicle loans, credit cards, personal loans, and by now, pay later have improved, but short-term, arrears rose by 2000 in July to 480,000 people.

That's 12.4% of the credit active population. Business credit defaults climbed 8% year on year. Though the pace of increase is slowing, which is good news. Manufacturing is hardest. Hit with defaults up 19%, followed by properties and rentals at 13%. Company liquidations rose 26% annually with construction up 46%, 765 cases, and hospitality up 49%.

297 cases, partly due to stronger tax enforcement and obviously the tough economic times that we are in, especially in the construction industry and hospitality industries.

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 Second topic for this weekend, review from staff on the 2nd of September. Housing is no longer New Zealand's economic heroine. Now what?

For decades, rising property values have fueled New Zealand's economy, but that era may be ending as housing minister Chris Bishop pushes for a fundamental shift, reducing house prices and ending housing as the primary driver of wealth. Historically suggesting price drops with political suicide in 2013. Then green co-leader Meitiria Turei faced backlash for saying houses should be more affordable. Today, Bishop openly advocates for falling prices without apology. Bishop aims to tackle intergenerational inequality in home ownership. He argues young people lack the opportunities previous generations had and blames decades of policies like grants, tax debates, and early Kiwi saver withdrawals for worsening affordability.

By inflating prices, he believes home ownership should no longer dictate economic success. Instead, other investment avenues should become more attractive as property speculation loses appeal. Bishop is building on Labour's national policy statement on urban development N-P-S-U-D, which requires councils to enable more housing density.

He's cutting red tape, consolidating zoning rules from 1300 down to a handful, and curbing overly prescriptive regulations. Key moves include high density zones near transport hubs, 15 story buildings near city rail link stations, and 10 story near major transit points. Simplifying planning laws to reduce compliance costs, removing excessive design controls, giving developers more freedom.

Bishop argues that affordable housing drives productivity and economic growth, noting that restrictive housing policies of burdened government finances. Last year housing assistance cost $5 billion. Prime Minister Christopher Luxon announced a policy allowing foreigners to purchase homes worth $5 million plus, provided they invest at least the same amount in New Zealand over three years.

Labour says this will push prices up. Luxon disputes this, claiming such homes represent under 1% of the market. Economist Shamubeel Eaqub says that the days of huge property gains are potentially over, but prices won't collapse overnight. The transition away from housing driven wealth will take time, possibly decades.

He warns current generations who hope to get rich from property are stuck while future generations will need to seek wealth through KiwiSaver, businesses and other investments. Might be a good time to point out the fact that Shamubeel Eaqub now works for Simplicity, which provides long-term rental accommodation , and also obviously a KiwiSaver provider as well.

Bishop expects pushback from property owners and NIMBY groups not in my backyard groups. Opposing urban intensification. Eaqub adds that sellers of high priced homes may blame reforms for stagnant sales as buyer demand no longer matches expectations. In for metrics. Brad Olson says that the reforms are crucial for economic stability, even if the housing market's cooling dampens short-term spending.

But my thoughts on this are, I don't think it's a bad thing for housing to become more affordable in this country. I don't expect house prices to crash in New Zealand because there's still plenty of demand from buyers. We've seen what happens when there's an increase in supply, and at the end of the day, it all does boil down to supply and demand.

So, although increasing supply can slow down the growth of house prices, cost of building is gonna continue to increase over the long term. And, you know, at some stage, no doubt, we will have to open up the immigration again to bring more people into New Zealand to fill jobs that we can't fill any other way.

So at some point I would expect that imbalance between supply and demand to tip the other way, which is going to cause increasing prices, we might not get the same strong capital growth that we've seen over the past few decades. But look, nobody's expecting capital growth to be less than five to 7% on average over the long-term.

So yeah, I think, these are a little bit of shock tactics. Realistically, house prices are gonna continue to climb just potentially at a slightly lower rate than what they have over the past few years.

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 Topic number three from The Post on. I mean, I don't have a crystal ball though, so you know, house prices might boom.

They might get way higher than what anybody expected, or they might be slower to pick up in values. Nobody knows. So it does boil down to making sure that whenever you're investing in property, you're buying based on the fundamentals. And look, anyone who's looking at buying a home, that's one of the best things that you can do to improve your financial position over the long term.

Nobody should be renting in retirement. That's a recipe for financial train wreck in retirement. Right?

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 Topic number three, from the post on the 1st of September, zero growth year ANZ predicts no house price growth for 2025. Well, considering that we're already in September now, you know. What can I say?

Hopes for a late year rise in house prices have been dampened with ANZ forecasting zero growth for 2025 and its latest property focus report. This marks a shift from its earlier projection of 2.5% growth. The bank noted that a subdued winter saw prices fall back to late 2024 levels coinciding with broader economic weakness

between April and June, Auckland led the declines while the south island markets remained a lot more resilient due to stronger job conditions. ANZ now expects house prices to grow 5% in 2026, supported by lower interest rates and a cyclical economic recovery. Economists said price falls were most pronounced in Auckland and Wellington, while other North Island regions were mostly flat.

South Island prices held firm boyed by stable employment and a robust rural economy alongside tourism recovery. Waikato experienced the fewest job losses among North Island regions. In contrast, Wellington faced deeper challenges with recent Department of Internal Affairs restructuring cutting 126 jobs, adding to hospitality and retail closures.

These job losses contributed to stagnant property prices and falling rents down 5% year on year in Wellington and 2% in Auckland compared to a national average decline of 1.4%. House sales remain steady and inventory levels previously high, a trending back to normal. Although Auckland stock is still rising.

Outside major centers inventories have started to fall signaling gradual market stabilization. ANZ expects further price declines in the coming months in some regions. However, the Reserve Bank's unexpectedly aggressive easing stance at its mon at its August monetary policy statement led ANZ to predict the OCR will fall to 2.5% by year end.

This could gradually improve housing sentiment, but recovery is likely to be slow due to soft job markets and high levels of stock in the property market. ANZ still expects 5% house price growth in 2026. As I said before, tempered by expectations that rates will rise again at a later stage.

ANZ Chief Economist Sharon Zollner said they now anticipate rate cuts in October and November earlier than they previously forecast.   📍  📍 If you'd like to learn more about investing in property and make sure that you get the fundamentals right, join me at one of our free events called How to Succeed With Property Investing.

I'll discuss strategies for successful investing from my perspective as an experienced investor and financial advisor, and all of our free events are available live and online. One thing I can tell you for free is that you should never rely purely on capital growth to make a property investment work.

Check out www.propertyapprentice.co.nz for upcoming dates and register today. We don't sell property, so it's all about increasing your knowledge to reduce your risk.   📍  📍 If you've already been to one of our free events and you'd like to find out more about how we can help you to reach your financial goals, you can also book a no obligation phone call or meeting with my husband Paul Roberts via the website.

 

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Topic number four, from Stuff on the 2nd of September. Safe haven, wealthy Americans flock to buy their way into New Zealand. Americans now make up the largest share of wealthy foreigners, applying for New Zealand's active investor plus Visa, a residency scheme requiring a minimum $5 million investment over three years according to immigration New Zealand.

Recent figures show 129 applications from the US covering 386 people, followed by China with 45 applications for 152 people, in Hong Kong with 38 applications for 113 people in total, the scheme is received 308 applications globally, representing about a thousand individuals. Deputy Prime Minister David Seymour, confirmed legislation easing the foreign buyer's ban, allowing successful applicants to purchase or build homes worth.

At least $5 million is expected before mid before the end of this year. Immigration consultant and former minister Stuart Nash said that the influx reflects Americans seeking stability rather than tax advantages. He described the US as deeply divided and said, many wealthy individuals want a plan B amid the political uncertainty.

Historically, Americans have not been among the top migrant groups to New Zealand. Recent stats, New Zealand data recorded just 254 net arrivals from the US in the year to June. Nash noted that affluent migrants often prefer to stay low profile, but still contribute to local communities. He cited the example of billionaire Julian Robertson, who left $200 million worth of art to the Auckland Art Gallery in 2022

as an illustration of potential generosity. Prime Minister Christopher Luxon positioned New Zealand as a safe haven in an uncertain world, saying that the move aims to attract investment and boost economic growth. Nash argued, there are no downsides to wealthy investors purchasing luxury homes and funding development.

Labour leader Chris Hipkins criticized the policy as favoring foreign elites. While locals face housing challenges, I mean, for crying out loud, there's not that many people that are in the market to buy $5 million properties. It's not gonna affect by far the majority of New Zealanders.

Chris Hipkins warned that pressure on the luxury property market could ripple into overall price increases. I'm not sure how, when it all boils down to supply and demand at the end of the day. Former Deputy PM Winston Peters, who supported the original foreign buyer ban, defended the reversal as pragmatic decision saying his supporters would see it as common sense.

And Winston Peters has also previously commented about how it's less than 1% of New Zealanders are in that market of $5 million plus. So it's certainly not gonna affect first home buyers and it won't affect the majority of homeowners in New Zealand. 

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Topic number five, from Ministry of Housing and Urban Development on the 1st of September, annual rental price index update. While the official stats New Zealand rental price Index remains paused,

updated data from the Ministry of Housing and Urban Development or HUD highlights recent trends in rental prices across New Zealand. Key Insights as of July, 2025. Nationwide: rents for new tenancies are marginally lower than a year ago, down 0.1% compared to July, 2024. Wellington continues to experience the steepest decline with rents falling 6% year on year, reflecting ongoing economic pressures in the region.

Canterbury reports its lowest annual inflation rate since the COVID-19 disruption sitting at 0.8% and Auckland showing initial signs of a rebound with rents edging up 0.1%. Although it's a bit too early to confirm a sustained recovery just yet. HUD expects that over time rental supply and demand will continue to rebalance, allowing inflation rates to trend closer to historical averages.

With house prices holding steady, rents shifting, and foreign buyers are entering the market. Do you know what this means for your portfolio?   📍  📍 Join me at one of our free events called How to Succeed With Property Investing. These events are all available online so you can gain valuable insights and strategies tailored to today's market conditions regardless of where you live.

Whether you're an experienced investor or just getting started, these free training sessions will equip you with the key tools and insights to make more confident, informed decisions. Don't miss out. Register today and take the next step towards achieving your financial success. In our free events. I'll also tell you more about how we could help you if you were a client of ours to achieve your investing goals.

So if you are interested in finding out more about how we can help you, go to www.propertyapprentice.co.nz to and register for one of our free events today.   📍  📍 If you've already been to one of these and you'd like to know more about how we can help you on your journey book a no obligation phone call or meeting with my husband Paul Roberts through our website, www.propertyapprentice.co.nz

 Thanks for listening. 

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