November 21st, 2024
In a move aimed at addressing the shortage of quality rental housing, New Zealand has opened its doors wider to overseas investment in the Build To Rent (BTR) sector, according to a new directive letter issued to Land Information New Zealand (LINZ) by Associate Finance Ministers David Seymour and Chris Bishop.
The big picture: The directive aims to clarify and solidify the government's policy on overseas investment in BTR developments, a housing model dedicated to long-term rentals. It is designed to attract international capital by offering a more straightforward path for such investments, thereby boosting the supply of quality rental homes, according to a media release issued on Thursday.
Zoom in: Bishop highlighted the pressing need for better rental housing to alleviate housing affordability issues. The government views the BTR model as a crucial component in revitalizing the housing market and, by extension, the broader economy.
"New Zealand is open for business for Build To Rent developments," Bishop affirmed, signalling a strong invitation to foreign investors.
Driving the news: This initiative follows a March 7 announcement regarding changes to the Overseas Investment Act, aimed at creating a more streamlined process for overseas investors interested in BTR assets. The directive instructs LINZ to view overseas BTR investments as beneficial to New Zealand, facilitating a more efficient application process under the "increased housing test."
What they're saying: Seymour expressed optimism about the directive's potential to provide investors with greater certainty and attract necessary foreign capital and expertise to New Zealand's housing sector. The approach is seen as a vital step towards ensuring adequate housing and improving the quality of life for New Zealanders through enhanced economic growth.
What's next: The directive is effective immediately, applying to all BTR investment applications reviewed by LINZ from this date forward. As the government works on legislative changes to solidify this pathway, the directive serves as an interim measure to encourage investment and address the housing shortage.
The bottom line: By welcoming overseas investment in BTR housing, New Zealand aims to tackle its quality rental housing shortage head-on, contributing to a more robust economy and a better standard of living for its citizens. This move underscores the government's commitment to solving the housing affordability crisis and improving public services through economic strength.