Australian investors turn to New Zealand property market
Australian interest in New Zealand investment property is rising, with lenders and agents reporting a sharp increase in enquiries as buyers compare pricing, tax treatment and rental prospects across the Tasman.
Regional Queensland investors Dick and Penny Webster are among those moving capital into New Zealand. The couple bought a three-bedroom Queenstown home with lake views for NZ$2.13 million ($1.77 million) in mid-June and plan to rent it to tourists throughout the year.
Dick Webster said the property offered a 10 per cent return on their money, compared with about 5 to 7 per cent on other commercial or residential property around Toowoomba. The couple also plans to use the Queenstown property when it is vacant and make it available to their children.
Australian buyer enquiries jump
Ray White Queenstown agent Arron Sundars said the Webster property attracted 68 enquiries after it came to market in late May, including 40 from Australians.
Non-bank lender Pepper Money also recorded a 650 per cent increase in enquiries from Australians seeking investment property in late May. It typically receives about two such enquiries a month, but that number rose to 15 in the four weeks after Labor announced changes to investor tax concessions in its May budget.
Pepper Money New Zealand country head Campbell Smith said Australian buyers had shown particular interest in lifestyle and holiday markets including Queenstown, Wanaka, Central Otago, the coast north of Auckland and the central North Island lakes district. He also noted some interest in Auckland and Christchurch.
Queenstown is also being compared with high-priced Australian holiday markets. Noosa Heads had a median dwelling price of $2.065 million, compared with NZ$1.513 million ($1.26 million) in Queenstown.
Tax settings remain important
New Zealand’s tax treatment is one reason some Australians are examining the market. Matt Nolan of data analyst firm e61 said New Zealand does not impose capital gains tax on properties held for longer than two years and does not charge stamp duty. The country also partially allows negative-gearing tax discounts for residents.
Those settings do not remove Australian tax obligations. Nolan said Australian investors who remain Australian tax residents are still subject to Australian capital gains tax rules.
Foreign rental income must also be reported in Australia, while New Zealand rental income is subject to local ring-fencing rules that prevent it being used to offset other wage income. Australian buyers therefore need to consider both tax systems rather than treating New Zealand rules in isolation.
Lower rates support property activity
The renewed Australian interest comes as New Zealand’s property market emerges from a downturn that followed the post-COVID period of higher interest rates.
New Zealand’s official cash rate is now 2.5 per cent, after the central bank had lifted rates as high as 5.5 per cent before mid-2024. Smith said lower rates had increased borrowing power and helped property transactions recover, while values in some regions had gone through a significant correction.
Investors still face market-specific risks. Home insurance can be expensive in New Zealand and some dwellings may be uninsurable.
For Australian investors comparing the two markets, New Zealand’s appeal is being shaped by property values in selected regions, changed borrowing conditions, holiday-rental opportunities and different tax settings. The reported rise in enquiries shows those differences are receiving closer attention from Australian capital.
SOURCE ATTRIBUTION:
Based on reporting by The Australian Financial Review, published 20 August 2026. Source: https://www.afr.com
