Monday, April 22, 2024

Law changes poised to unlock build-to-rent investment

Housing and Associate Finance Minister, Chris Bishop today announced the Government will introduce legislation to make it easier for overseas investors to invest in build-to-rent developments in New Zealand.

Cabinet has agreed to make changes to the Overseas Investment Act 2005 to better support build-to-rent housing developments, fulfilling another element of the Coalition government’s 100 Day Plan, the Minister said.

“Build to Rent developments are a relatively new form of rental housing in New Zealand, which are common overseas but rare in New Zealand.”

“They consist of purpose-built, medium-to-large scale rental properties developments, often within walking distance to key transport links. The developments tend to be professionally managed, with good amenities, and offer residents a variety of lifestyle options,” said Mr Bishop.

“These types of developments often offer longer leases to tenants, making them a popular choice for renters. They are often financed and operated by institutional investors and developers (such as pension funds).”

He said build-to-rent housing offers an opportunity to increase the supply of secure, affordable and quality rental developments in New Zealand, placing downward pressure on rents.

“The sector is currently small in New Zealand with only 22 registered developments, but there is great potential for growth.”

“New Zealand’s complex overseas investment laws are holding the Build to Rent sector back. Cabinet has therefore agreed that the Overseas Investment Act will be amended to create a new streamlined consent pathway that would allow investors to purchase land with the intention of building a new Build to Rent development or purchasing an existing one.  

“Cabinet has also agreed that a ministerial directive letter will be issued under the Act to provide immediate certainty that New Zealand is open to foreign investment in Build to Rent developments.

“The coalition Government remains committed to the ban on overseas investment into existing residential housing and land in New Zealand (unless the investor is eligible for a consent). The changes we are announcing today are all about adding to supply of housing and making it easier for Kiwis to get into a warm and dry home.

“There is no silver bullet to solving New Zealand’s housing crisis, so we need to take every option available to us to get more homes built,” Mr Bishop said.

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