A planned Kiwi Property build-to-rent development in Sylvia Park, Auckland. Photo: Supplied
The coalition government will introduce legislation to make it easier for overseas investors to invest in build-to-rent developments, Housing and Associate Finance Minister Chris Bishop says.
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.
"Build-to-rent developments are a relatively new form of rental housing in New Zealand, which are common overseas but rare [here]," he said.
The purpose-built, medium- to large-scale rental property developments were often within walking distance of key transport links. Such complexes often offer longer leases to tenants, and could be financed and operated by institutional investors and developers, such as pension funds.
"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," he said.
The Overseas Investment Act would be amended to create a streamlined consent process, allowing investors to purchase land with the intention of building a new build-to-rent development or purchasing an existing one.
Under the amended act, a ministerial directive letter will be issued to signal that New Zealand was open to foreign investment in such 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."