Demand for short-term, high-value home rentals is surging. Photo: Supplied
- Demand for short-term, high-value home rentals is surging, particularly in Auckland and Queenstown, with owners leasing out homes valued between $8million and $20million to vetted international clients.
- The so-called 'golden visa' for foreign investors is driving the change, along with US political and economic instability, Canada's proposed wealth tax, and a decade-low NZD-USD exchange rate.
- High net worth vendors are earning three-times above market rental rates through off-market deals.
Political and economic uncertainty in key offshore markets could have a silver lining for New Zealand's listless premium real estate market, says a luxury homes agent.
Real estate agent Caleb Paterson said a new 'try-before-you-buy' model was emerging locally, with some clients paying up to $30,000 a week to rent off-market homes while they "awaited clarity" on New Zealand's foreign buyer ban.
The Paterson Luxury director said the revamped investors' visa was fuelling the ultra-luxury rental market, and it good news for sellers of luxury homes who could not find a buyer.
"We're dealing with a lot of home owners in that luxury space and the market is not responding where they want [it], so now they're having to reassess all their options. So if someone's willing to come in and pay three times above what the normal weekly rental amount could be for a property, it frees up options for them. It means they've got extra income while they're still holding that asset waiting for the market to bounce back."
Latest Real Estate Institute New Zealand (REINZ) data showed a glut of premium homes languishing on the market. In Auckland, the median number of days to sell properties valued at $3.5 million rose from 42 days in March last year to 64 days in March 2025. Queenstown saw a median 95 days to sell luxury listings.
The luxury property market was significantly down year on year, and it was "very much wait and see" at the moment, Paterson said. "This time last year I'd sold 10 properties, this year I've only sold two up to this point." In the past few weeks he had had four deals - worth more than $20m in total - collapse, "due to different mitigating factors such as international pressures".
He had "a lot" of clients looking at purchasing properties who had subsequently withdrawn. "I had one client lose a million dollars on the stock market, another [deal] couldn't progress because the buyer's business was in import and export."
Caleb Paterson. Photo: Supplied
Normally half the deals under contract would complete, he added. "At the moment that's sitting around more like 20 to 25 percent. We're definitely seeing a big decrease in those deals going through."
A lot of high-end vendors in the baby boom demographic were looking to sell up, and many were prepared to meet the market, he said. The vendors of one off-market property "worth $20 million on paper" were happy to drop their price to $15 million but even the $5million price-drop was not enough. "We are getting good properties on market [but] we're just not getting that buyer inquiry come through."
Half of Paterson's current listings - which include homes valued between $8m and $20m - were now available for rent, and many were receiving "multiple enquiries" before even hitting the open market. It also had around 380 off-market properties on the books, he added.
Paterson said the shift to 'try-before-you-buy' had come amid rising uncertainty in key offshore markets. For example, many of his Canadian clients were seeking to exit due to proposed wealth taxes and capital gains reforms, while American buyers were "increasingly motivated" by political instability and upcoming elections. New Zealand's distance from "international hotspots" like the Russia-Ukraine war was another attraction, as well as a decade-low NZ-US dollar exchange rate.
"Some are saying they just don't want to live under another Trump presidency. Others have had New Zealand on their radar for a while and the current visa discussions have reignited that interest," he said.
The current glut of luxury homes would not shift until the government overhauled the foreign buyer ban, Paterson said.
"The challenge we've got is that we don't have the buyers to come through which then releases the equity in that baby boomer category that then flows through to the rest of the market. The 'golden visa' changes have been positive and we're seeing more robust conversations from international investors but what we really need to see is a loosening of the foreign buyer policy."
National campaigned on repealing the foreign buyer ban for homes worth more than $2 million in the 2023 election campaign.
"There's now conversations around easing that up for the $5m-plus [market] ... if that came into effect we would have a large increase of buyers and actually that would enable that cash to flow through the economy."
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