Property PR Agency’s New Zealand Real Estate Client Makes National Headlines
Impact PR is one of the few specialist property PR agencies in New Zealand, working extensively with industrial and residential developers, NZX listed property companies, architects, construction firms, property consultants and agents in the sector. This week, their client Paterson Luxury, a premium real estate agency, made nationwide headlines following the release of their analysis that identified a growing trend of multi-millionaire Kiwis leaving NZ to move to Australia.
Impact PR was on hand during the production to coordinate the media opportunity for Caleb Paterson – leveraging it in local media for their client. Positive media coverage was seen in a wide range of high-reach titles including Newshub, Radio New Zealand and The Post.
See more below and read the full story:
MEDIA RELEASE • 11 JUNE 2024
Exodus of High Net Worth Kiwis to Australia Set to Impact Property Market
More needs to be done to offset the loss of millions of dollars in property and business investments to Australia caused by a growing exodus of high-net-worth Kiwis, according to an industry expert.
New real estate industry data shows that over 50% of vendors who have sold multi-million dollar homes over the past six months have moved to Australia. The sale value of the homes ranges from $4 million to $10 million plus.
Caleb Paterson of real estate agency Paterson Luxury says in addition to the sale of their residence, these home homeowners are also liquidating their other business and real estate holdings here, resulting in the loss of tens of millions of dollars worth of investment leaving the NZ economy each week.
He says the lack of wealth being recycled at this level is contributing to a growing surplus of high-end properties around New Zealand.
“What we know about this demographic is they are extremely well-educated, skilled professionals who have the means to relocate to a new country without the constraints that many other Kiwis face.
“While a comparatively small proportion of New Zealanders leave the country, they often have significantly higher asset holdings and may own businesses that employ hundreds of Kiwis. As a result, their departure from NZ has a disproportionately large impact on our economy.
“I was working with one family recently who sold their house for over $4 million and then liquidated their business investments of a further $14 million. These funds will now be invested into the Australian economy.
“The cumulative loss of wealth we are seeing at the coal face in recent months has been staggering and is reducing the pool of buyers in this segment of the property market and creating a glut of multi-million dollar residential homes,” he says.
Paterson says urgent changes to the existing investor visa framework for wealthy migrants are needed to help offset the millions of dollars of investment funding and skillsets being lost to New Zealand.
Data from Paterson Luxury sales Jan – June 2024
“While reports suggest it is easy for low-skilled labour to enter the market, the process for high net worth investors remains unnecessarily fraught with red tape.
“We have seen migrants who have been frustrated with New Zealand’s investor visa process look for alternative ways to buy property here, such as getting residency in Singapore or, simply giving up on this option and opting to gain entry to NZ via the more expedited Skilled Migrant visa instead – both create an avoidable loss of millions of dollars of investment to our economy,” he says.
Paterson says the growing trend contributes to dramatic discounting and creating a buyer’s market.
“For those on the look out for a new luxury home and who have the ability to purchase, these market conditions have created a significant opportunity.
“Vendors needing to sell in the short term, have been discounting in some cases in million-dollar increments. However, for those in a position to wait it out, one in every five listings, a record number, has been withdrawn from the market so far this year,” he says.
Paterson said demand from high net-worth Kiwis moving to Australia has been so high he has established a trans-Tasman partnership with real estate agents in six Australian centres to help place them in new homes.
“Many of the record number of Kiwis moving offshore are moving because they have become disenfranchised with New Zealand in recent years.
“The Australian lifestyle is appealing, however, they don’t have the local knowledge of which suburbs would best suit their needs and so we have created a trans-Tasman network of agents to support their move into that market,” he says.
Paterson says the current surplus of luxury properties is a downstream consequence of the Government’s decision to retain the foreign buyer’s ban.
“When news of the potential lifting of the ban hit the market last year, property owners in the $3.5m+ segment began readying their homes for sale.
“The short notice of the government announcement prevented these homes from listing for sale before the peak summer season and it was inevitable that we would see this wave of new enter the market since the start of the year,” he says.
Paterson says with indications that prices in the premium end of the market have bottomed out and economists forecasting a 7% uplift by the end of the year while he is advising vendors who want to remain in the country to remove their homes from sale.
He says depending on their circumstances, as with the current economic environment there are other investments that will provide better returns for their portfolios.
Patterson says for some owners, a strategic retreat from the market now could represent a half-million-dollar increase in their sale price.
“With the rate of growth in the trans-Tasman property market, anyone looking to move over there should list their property for sale now.
“In contrast, for vendors who are planning to stay within New Zealand, our advice is to remove your home from sale and try again at the end of the year.
“If you are downsizing from a $10m to a $2m home and depositing the balance in the bank, a 7% growth on your original home is $700,000 while 7% of $2m is $140,000.
“Based on the rate of market growth being suggested by economists, this would mean a $560,000 difference, just for sitting around and waiting until the end of the year. For anyone at that stage in their life, half a million dollars is a significant number.
“What we are seeing at the moment is a number of bargain hunters who have been in the wings for some time now and are starting to commit to a purchase.
“This type of behaviour is a strong indicator we are at the bottom of the market,” he says.
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