With an ‘amnesty’ imminent, 160,000 potential buyers emerge: where next for New Zealand house prices? Industry leaders weigh in

Just last week, YIJU learned from senior Queen City Law immigration lawyer Sonny Lam that the new November work visa policy contained a significant gap and warned that an appropriate bridging visa was needed to address it. Sure enough, a new one-off residence visa was announced today.

The news sent local Chinese WeChat circles into a frenzy! In our view, the policy granting permanent residence to 165,000 people is also a step the New Zealand Government has been forced to take amid the pandemic. Immigration New Zealand has accumulated a large backlog of residence applications that it cannot process on time, making it a target of widespread criticism. Meanwhile, visa problems faced by work visa holders since the pandemic began have caused a substantial loss of talent, making it necessary to retain more workers. The latest outbreak has also left industries across New Zealand struggling. With the borders closed, the country urgently needs fresh stimulus to drive its domestic economy. YIJU therefore contacted representatives from several New Zealand industries for their reactions to the new immigration policy:

Will the new immigration policy benefit or harm New Zealand’s social and economic development? Here are the reactions of several industry representatives whom YIJU contacted urgently:

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Impact on New Zealand’s economy and construction industry

President of the New Zealand Chinese Building Industry Association

Frank Xu

This new immigration policy is very positive news for the economy as a whole and the property industry. These people were previously unable to buy local property, apart from exempt categories such as apartments available to local non-permanent residents and overseas buyers. Once they gain residence status, they can buy without restrictions, further stimulating the market. There are already fewer listings than real estate agents, so this will worsen the shortage of listings. Those who meet the new policy’s eligibility requirements also earn fairly high wages and should be in a relatively good financial position to buy. I believe that over the coming months and the next year or two, if these more than one hundred thousand people choose to buy homes and settle down, a substantial proportion may opt for affordable housing. I therefore see this as very positive news for that category. It is also very positive for construction. Many people working in the industry can finally pursue careers they enjoy in New Zealand with peace of mind. Skilled workers can focus on their jobs without worrying about their immigration status. Once the border opens, this will also encourage more such workers to come to New Zealand, further easing our industry’s skills shortage.

 

Impact on house prices in major cities

Founder of Huarong Credit

York Zhang

The new residence visa policy will certainly boost demand for property. Work visa holders applying for residence already earn reasonably good wages, and once they gain residence, buying a home will surely be among their first considerations. With this additional buyer demand, and work visa holders concentrated mainly in New Zealand’s major cities—Auckland, Hamilton, Wellington and Christchurch—these cities could see an immediate increase in housing demand. People’s basic needs are much the same, and migrants will also bring their families over. Sellers will certainly see this trend too. If they hope to capture the benefits, they will continue pushing house prices higher.

 

Impact on New Zealand’s wider economy

Executive director of Buckland Marine; Coastguard commander 

Wayne Huang

Personally, I welcome the new immigration policy, but the Government has also fallen short in some respects. The Labour Government still has a long way to go to revitalise the national economy during the pandemic! With labour shortages across New Zealand’s industries, the Government should have acted earlier and systematically, rather than dealing with problems piecemeal and treating symptoms instead of causes. I work in education and the marine industry, one of New Zealand’s economic pillars. Both need more skilled people to stay if they are to survive and grow. Pandemic uncertainty and skills shortages forced the cancellation of the international boat show scheduled for Auckland in November this year. Had this visa policy been introduced earlier, perhaps the event would not have been cancelled. Would using the money spent on wage subsidies to bid for the America’s Cup have done more to stimulate the economy? What I welcome most about the immigration policy is its ability to retain talent. Construction is far from the only industry severely short of specialists; education is in the same position. If more teachers can stay and more schools can avoid closure, they will be able to attract international students again when the border eventually reopens. The New Zealand Government has also shown the world a humane side through this policy. I believe more overseas workers and international students will make New Zealand their first choice for future study and migration.

 

Impact on property sales and purchases in New Zealand

Barfoot & Thompson sales agent 

Rose Hu

As a real estate agent, I see the most immediate effect as many people becoming eligible to buy homes when they previously were not. Housing is an essential need for them. Auckland has long faced a housing shortage, with many people already queuing to meet that need; this effectively adds more people to the queue. With housing already in short supply, this immigration policy change will undoubtedly increase demand further. Auctions have continued during lockdown. Most involved properties carried over from before lockdown; some auctions went ahead as scheduled, while some owners postponed listing or auctioning their homes. After lockdown, buyers previously affected by the restrictions will search harder for homes. Now another group of buyers with essential housing needs has emerged, making supply and demand even tighter. Anyone needing to buy a home should start following property and construction news. Buying is no easy task: you need to keep up daily with industry information, relevant laws and building knowledge. I strongly recommend YIJU, the most professional media outlet covering property and construction.

Many work visa holders in New Zealand’s construction industry may benefit from the new residence visa. YIJU once again contacted senior Queen City Law immigration lawyer Sonny Lam for an exclusive explanation of the many questions raised by the new policy:

 

The new residence visa category will be called the ‘3S’ visa. Let’s first review the new rules. The three Ss stand for:

01

Settled: the time current work visa holders have spent in New Zealand as at 29 September—approximately 3 years

02

Skilled: the wage requirement of NZ$27 per hour

03

Scarce: workers with skills in short supply, including those in occupations on the Long Term Skill Shortage List (LTSSL), critical health workers, and workers in education and the primary sector

Sonny said priority should be given to applications already in the Skilled Migrant Category queue that have not yet been allocated an immigration officer, as these could be processed much faster than before. Selections of Skilled Migrant Category expressions of interest (EOIs) will remain suspended until at least July 2022. While clearing the backlog is welcome, we urge the Government to process existing EOIs and new residence visa applications as quickly as possible. Future migrants, businesses and people who do not currently qualify under the new policy need policy certainty from Immigration New Zealand to support them.

Sonny provided professional answers to the many questions readers have about the new residence visa policy:

Q1: Many WeChat articles say that, among the three S requirements, living here for three years is a mandatory prerequisite. Is that correct?

No. You only need to meet one of the three S criteria.

Q2: For the settled requirement, must current work visa holders have held work visas throughout their time in New Zealand up to 29 September this year?

They could previously have held any visa. Immigration New Zealand requires them currently to hold one of the following work visas:

• Post Study Work Visa
• Talent (Accredited Employer) Work Visa
• Essential Skills Work Visa
• Religious Worker Work Visa
• Talent (Arts, Culture, Sports) Work Visa
• Long Term Skill Shortage List Work Visa
• Silver Fern Practical Experience Work Visa
• Trafficking Victim Work Visa
• Migrant Exploitation Protection Work Visa
• Skilled Migrant Category Job Search Work Visa
• Victims of Family Violence Work
• Visa South Island Contribution Work Visa
• Work Visa granted under Section 61 (provided the applicant held another eligible visa type within 6 months of being granted a Section 61 visa)
• Some Critical Purpose Visitor Visas (CPVV): Critical health workers for longer-term roles (6 months or longer), and
• Other critical workers for long-term roles (more than 6 months).

Q3: Who might not qualify to apply for this residence visa?

Work visa holders who arrived in New Zealand after 29 September 2018, earn less than NZ$27 an hour and are not in a scarce occupation, as well as partnership visa holders, even if they earn more than NZ$27 an hour.

Q4: Can people currently overseas apply?

No, but there is an exception. Applicants who meet the above criteria, are currently in Australia and were unable to return to New Zealand before 29 September 2021 can also apply.

Q5: What should people who qualify for the ‘amnesty’ do now? Can they change jobs? Can their pay change? Can they return to their home country?

In principle, they can change jobs; please contact us for professional advice before doing so. Their pay must remain above NZ$27 an hour. They cannot leave New Zealand, as this visa requires applications to be made from within the country.

Q6: Is there no hope for people who do not currently qualify for this residence visa? For example, could current student visa holders meet the requirements before the application date?

People who do not currently meet the requirements should not be discouraged. More residence visa categories will be introduced in future. Please contact us at any time with further questions. Our immigration law team can help you choose the most suitable pathway and obtain a visa as efficiently as possible.

 

About the expert

Sonny Lam

He has 15 years of litigation experience and previously worked as an immigration officer at Immigration New Zealand. He is currently an immigration lawyer at Queen City Law.

After leaving Immigration New Zealand in 2015, he began specialising in immigration, offering sound professional advice on immigration and employment law matters from the perspectives of both applicants and the immigration officers assessing their cases.