New Zealand, a hot spot for millennial travelers, is also a vacation-home hub for the wealthy: Billionaire Peter Thiel and director James Cameron recently bought estates there. "The list of rich businessmen capitalizing on island's natural beauty is long," reports Town & Country magazine. But that might be about to change.
Newly elected Prime Minister Jacinda Ardern has pledged to pass new laws that will keep "anyone who isn't a citizen or a permanent resident from buying existing houses," The Wall Street Journal reports.
"We are determined to make it easier for Kiwis to buy their first home so we are stopping foreign speculators buying houses and driving up prices," Ardern said in a statement. "Kiwis should not be outbid like this."
Net migration into the country, which increases competition for the limited supply of existing housing, hit record highs this year, reports the Guardian. From the beginning of 2017 through May 31, 72,000 migrants came into the country, versus 68,400 over the same period the year before. Chinese citizens accounted for the largest portion of the arrivals at 12 percent, while 10 percent each came from the U.K. and Australia.
The effect is that the country now has the most unaffordable housing in the world, according to Newshub, a local media company, which cites The Economist.
New Zealand earned the distinction after coming out on top of three common expense measures, Newshub explains. The country has the highest housing cost when measured against the average income, the largest difference between home and rental prices and the highest recent rise in housing prices. Over the past 46 years, those have risen by more than 8 percent on average each year.
Aspiring first-time homeowners in the U.S. also deal with unprecedented housing costs. According to data from Zillow, "in today's hot housing market, more Americans are renting than at any time in recent history."
"Today's buyers have a median age of 40, are married or living with a partner (70 percent), earn a median income of $87,500 annually and are overwhelmingly Caucasian/white (73 percent)," the report says. "Only 39 percent of millennials are able to make the standard, recommended down payment of 20 percent or more, and 21 percent put down the bare minimum in order to secure a home loan."
Still, Americans don't have it quite as bad as Kiwis.
In Aukland, New Zealand's biggest city, the average house goes for $685,000 USD, reports Bloomberg. The 13th Annual Demographia International Housing Affordability Survey 2017 ranked Aukland as the forth most expensive housing market in the world, reports CNN. San Jose, Calif., the most expensive U.S. city listed, was ranked fifth.
Meanwhile, eight U.S. cities appeared on the list of the most affordable housing markets.
If Ardern's ban does go into effect next year, it does not necessarily mean you can't move to New Zealand. But it does mean buying a home there might be more expensive and complicated, as foreigners will be restricted to buying vacant land and building houses themselves.
If you're Australian, you can already travel without a visa in New Zealand, and you'll be exempt.
Like a growing number of Americans, you could also choose to go all in. As Town & Country reports, "the number of Americans who applied for a grant of citizenship rose by 70 percent in the 12 weeks following the election of President Donald Trump."
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