Covid 19 coronavirus: Why billionaires are snapping up second homes in New Zealand

New Zealand has announced it will form a corridor with Australia from April 18, allowing free travel between the two countries.

While the rest of us may have to wait until 2022 to be allowed in, when the majority of the country has been vaccinated and its success rate has had a chance to prove itself, it remains a firm favourite among billionaires the world over, who have long seen it as the ultimate escape.

It’s been a few years since we first began reading about Silicon Valley executives becoming “Doomsday preppers” by buying vast tracts of land in New Zealand and installing underground bunkers on them, to escape to should Armageddon strike. But that’s been going on ever since.

Billionaire German-American PayPal co-founder Peter Thiel made headlines when it was discovered he had bought at least two estates, one in Queenstown with a house and panic room, the other, a 193ha estate on the shores of Lake Wanaka and been granted citizenship in New Zealand. Then there’s Canadian director James Cameron, who fell in love with the place filming the first Avatar movie, owns multiple estates and is now a resident.

“It’s not difficult to see the appeal of New Zealand for the super-rich,” says Auckland-born Susie Marquis, founder of UK-based The Luxury Travel Book.

“It’s absolutely beautiful, the lifestyle is relaxed, the food and wine is excellent, the standard of living is very high and there is lots of space and privacy due to the small population.”

Understandably fed up with foreigners buying up land they hardly intended to set foot on, which in turn was pushing up property prices for locals, Prime Minister Jacinda Ardern passed legislation in 2019 banning foreigners from buying property in New Zealand, unless they came from Australia or Singapore or could prove another connection with a country, like being married to a Kiwi. In the past few days, rules have been tightened a bit further.

In reality, none of this means foreigners can’t buy a property in New Zealand – just that you need to go through a much more complicated and expensive approval process or sign up for one of the immigration investment schemes, the easiest of which involves investing $10 million in the country for three years and spending at least 44 days there during both the second and third years, which would put all but the wealthiest off.

New Zealand sits more than 1609km off the southern coast of Australia and is 10 per cent larger than the UK, but its population is less than five million, whereas the UK’s population is about 67 million.

Perhaps unsurprisingly, interest in New Zealand has only increased since the start of the pandemic and a few of those Silicon Valley billionaires managed to hop on a plane just before their borders closed last March.

Cryptocurrency entrepreneur Mihai Dinulescu and his girlfriend, for example, caught one of the last flights out of San Francisco to Auckland in March last year and moved into a rented house on the Martha’s Vineyard-like Waiheke Island, a 35-minute ferry ride from the centre of Auckland. Dinulescu told Bloomberg he linked up with about 10 other people in New Zealand who had done the same thing.

New Zealand dealt with the Covid pandemic exceptionally well, with only Canada doing better, according to detailed data analysis of how different countries coped, carried out by investment migration specialists Henley & Partners, based on multiple criteria including quarantine efficiency, healthcare readiness and country vulnerability.

“In April of last year, when New Zealand went into its first lockdown for a month, we saw a phenomenal amount of traffic on our website coming from overseas, with people looking to get out and that continued to climb as we came out of our lockdown,” says Suzie Wigglesworth of Knight Frank-affiliated, New Zealand-based Bayleys Real Estate.

“We’ve had a couple of smaller lockdowns since then but nothing to the degree of the rest of the world, so we’ve been incredibly lucky. There really are very few restrictions on our daily lives at the moment. Which is very attractive to anybody who is looking to come here.”

While New Zealand has always been a great place to visit and live, progressive New Zealand Prime Minister Jacinda Ardern is on a mission to make it even better and fairer by adopting the Happiness Index metric, which involves, among other things, creating a new budget focusing on the prosperity of local communities.

The new budget will include an increase of $200m for victims of domestic violence and housing programmes for the homeless. No other countries are pushing policy so explicitly targeting improving mental health, reducing child poverty, addressing inequalities faced by indigenous people, thriving in a digital age and moving to a low-emissions sustainable economy.

“I think people are attracted to the lifestyle over here,” says Wigglesworth.

“There’s a natural feeling of exclusivity. It’s easy to tuck yourselves away and keep your business to yourself. We’re generally known as a friendly nation, we’re not really concerned with what people’s backgrounds are, we treat people the same regardless.”

If you are dabbling with the idea of moving to New Zealand, when the borders do open up, it could be worth kicking off with an extended holiday to really get a feel for the place. A standard tourist visa lets you stay for six months and can often be extended for a further three.

There are some pretty extraordinary holiday rentals available, not least the new four-bedroom villa at Mt Isthmus overlooking Lake Hawea on South Island, whose contemporary design was inspired by the jagged peaks surrounding it, which opened in December. Or the equally amazing Owhaoko, the most luxurious “cabin” you’ve ever seen, on a wild and remote spot on North Island, both available through Scott Dunn Private.

If you’d rather be more central, consider one of the holiday rentals in the Queenstown area available through The Luxury Travel Book, like Villa Arrowtown, which sleeps 10 and is a walk to the nearest golf course, a five-minute drive to historic Arrowtown and 20 minutes to Queenstown itself.

In the past few days, the New Zealand government has announced it is both raising the minimum wage to $20 per hour and increasing the top tax rate for the highest earners (anyone earning $180,000 – about £92,000 – or over) to 39 per cent.

But it’s still a much better deal than in the UK, where you start paying 40 per cent tax when you earn over £50,000 ($97,480), a percentage which leaps up to 45 per cent when you earn over £150,000. So if you’re trying to dampen our enthusiasm for New Zealand, Jacinda Ardern, it’s not working.

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