Govt to change Overseas Investment Act for Build to Rent schemes

The Government will introduce legislation aimed at making it easier for overseas investors to invest in Build to Rent developments in New Zealand.

The announcement was made by Housing Minister Chris Bishop this afternoon, where he confirmed Cabinet had agreed to change the Overseas Investment Act to "better support" Build to Rent housing developments.

The move was another part of the 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 in New Zealand," he said.

“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."

He said that type of development often offered 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 offered an opportunity to increase the supply of secure, affordable and quality rental developments in New Zealand, which he said would place "downward pressure on rents".

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

Bishop said complex overseas investment laws were holding the Build to Rent sector back, so the Overseas Investment Act would be changed 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."

He said today's changes were "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.”