This Content Is Only For Subscribers
A surge in wealthy North American investors anticipating changes to New Zealand’s foreign buyer rules is fuelling a sharp rise in off-market luxury home rental demand, according to property experts.
Real estate agent Caleb Paterson says the country is seeing increased interest from ultra-high-net-worth individuals, particularly from the United States and Canada, who are looking to secure short-term leases in multimillion-dollar homes, while they wait for clarity around new investor visa pathways and possible amendments to the foreign buyer ban.
According to latest REINZ data, there is a growing glut of premium homes languishing on the market, with median days to sell in Auckland of properties valued at $3.5 million rising from 42 days in March 2024 to 64 days in March 2025 listings. In Queenstown, days to sell for luxury listings have climbed even higher, reaching 95.
“These are clients who could buy a home tomorrow if they were allowed,” says Caleb, founder of Paterson Luxury Real Estate. “They’re testing the waters, sometimes paying $20,000 to $30,000 a week to rent properties that fit their lifestyle and long-term ambitions.”
He says the dynamic is reshaping how vendors approach the luxury market, with many now embracing a ‘try-before-you-buy’ model as a way to attract offshore tenants and potentially convert them into future buyers.
He says New Zealand Trade and Enterprise has reported a 700 per cent increase in the number of people visiting the Active Investor Plus Visa application page, compared to the older version of the visa at the same time last year.
Caleb says he was approached by a premium rental firm wanting to match investors with properties after being unable to meet demand.
“While there is a surplus of rental properties at the lower end of the market, high net worth individuals have very specific accommodation requirements, and there is not enough suitable rental stock in the traditional market.
“This unmet demand has led to the development of a hybrid model, which is injecting hundreds of thousands of dollars into the economy each week.
“Traditionally, these homes would be listed for sale and sit idle while owners waited for the right buyer. But with the market stagnating in recent months we’re now seeing more owners open to short-term rental agreements, particularly as these international clients are happy to pay well above local market rates.
“We’ve got vendors who previously would never have considered renting their home now proactively asking us to place it with international clients for six to 12 months. If the foreign buyer ban is lifted, we expect many of these tenants will put in an immediate purchase offer on these homes,” he says.
Caleb says the shift comes amid rising uncertainty in key offshore markets.
He says many of his Canadian clients are seeking to exit due to proposed wealth taxes and capital gains reforms, while American buyers are increasingly motivated by political instability and upcoming elections.
“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 says.
Half of Caleb’s current listings – which include homes valued between $8 million and $20 million – are now available for rent, and many are receiving multiple enquiries before even hitting the open market.
“The demand is there, but the ability to purchase still isn’t and that’s what is driving this surge in ultra-luxury rentals.
“We’re also seeing foreign exchange rates playing a role – with the NZD falling to its lowest point against the greenback in the past decade early this month, it’s extremely favourable for these buyers, so what looks expensive locally can actually feel like a bargain to someone arriving from California or Toronto,” he says.
Caleb says some owners have seen rental returns more than triple what the domestic market would offer, particularly when facilitated through high-end rental agencies.
He says while one home might fetch $2000 a week in the traditional market, it could rent for $6000–$7000 through private arrangements with vetted international tenants.
“There’s a lot of wealth sitting in our homes that isn’t being unlocked because we’ve frozen out foreign investment. Opening a pathway for buyers at the $5 million-plus level could drive a major reinvestment cycle and ease pressure across the market,” says Caleb.
He believes now is the perfect time for the Government to remove the current uncertainty preventing downsizers from moving to the next stage in their life.
“We’re coming into winter, which is typically a quiet time, and without clarity, we’re seeing people sit on their hands. I’ve had Kiwi clients walk away from retirement village agreements because they can’t sell their homes, and that’s clogging up movement across every tier of the market.
“A typical high net worth downsizer will reinvest most of the proceeds from the sale of a $5m plus home in local businesses as they look to build their retirement incomes.
“Letting high-value buyers into the country not only stimulates the property sector it also brings in capital, supports tradespeople and helps unlock the next stage of the housing cycle. If this is done right there will be a transfer of wealth that benefits New Zealand down the track,” he says.
