At last! China reopens its borders with no quarantine! Will Chinese buyers return to New Zealand’s property market?

On 8 January 2023, after three years of restrictions, China officially lifted its border restrictions. International arrivals no longer need to quarantine or take a PCR test after landing. Travellers to China only need a negative PCR test taken within 48 hours before departure to enter the country.

 

China has also resumed accepting and approving ordinary passport applications from Chinese citizens travelling abroad for tourism or to visit friends, and issuing ordinary visas and residence permits to foreign nationals.

 

This finally makes returning home easier for overseas Chinese, while also greatly increasing people’s willingness to travel into and out of China.

 

Data shows that international flight bookings rose 628% year on year, reaching their highest level since March 2020. Inbound flights accounted for 48% of bookings and outbound flights for 52%.

 

 

Travellers pose for photos outside a Hong Kong border checkpoint before China reopens its borders. Tyrone Siu/Reuters

 

Meanwhile, following China’s recent surge in cases, many countries have announced additional requirements for Chinese travellers, such as pre-departure testing and proof of a negative PCR or antigen test.

 

Yet on 4 January, the New Zealand Government announced it would not impose mandatory pre-departure testing on travellers from China。Compared with countries imposing numerous restrictions, including the United States, Japan, the United Kingdom, Australia and Canada, New Zealand is bound to attract more Chinese visitors.

 

For New Zealand’s property market, China’s reopening will undoubtedly bring renewed activity.

 

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Property investment from China expected to rise

 

International opinion generally holds that China, as it continues to refine and adjust its pandemic measures, will become “the biggest driver of global economic growth”.

 

With China reopening its borders, property investment from China is expected to rise again.

 

Juwai IQI chief executive Kashif Ansari said outbound travel from China could return to 2019 levels by the middle of 2024。Travellers’ priorities include visiting family and friends, studying abroad, business, tourism and property investment.

 

He said: “For most Chinese people, this will be their first opportunity in three years to visit overseas property markets. We expect Chinese outbound travel and accompanying property investment to grow rapidly in January from their current very low levels.”

 

 

Helen Yan, director of Australian real estate agency Ray White Balwyn, said she expected most visitors to travel around Lunar New Year on 22 January.

 

New Zealand will remain one of Chinese property buyers’ favourite investment destinations. Ranked among the world’s happiest countries, it offers a more relaxed pace of life. Many Chinese people also aspire to enjoy its fresh air, high-quality water, safe food and pristine environment. Its globally unique permanent resident visa, allowing indefinite return, also remains highly attractive.

 

 

Although New Zealand’s foreign buyer ban may deter some buyers, exceptions remain. These include purchasing properties granted an exemption by the Overseas Investment Office (OIO), or buying jointly with others through a trust or company.

Meanwhile, New Zealand introduced new investor and skilled migration policies over the past year, with eligible migrants even able to apply directly for permanent residence. Provided these new migrants who have obtained residency are willing to live in New Zealand for 183 days, all properties will be open to them.

 

2000 Chinese IP addresses tune in to New Zealand auctions online

 

In fact, Chinese buyers have already been watching New Zealand’s property market recently.

 

Barfoot & Thompson auctioneer Murray Smith said 121,000 viewers watched online auctions in the three months to the end of October 2022. Most were from New Zealand (114,000), while around 3000 were from Australia, 2000 were from mainland China and 400 were from Hong Kong, China, with 380 from Hungary.

 

Smith said people from 55 countries, excluding New Zealand, watched live auctions over those three months.

 

Some overseas viewers may have been expatriate New Zealanders. Smith said it was difficult to know who was watching because only bidders had to register. However, viewing figures suggested that although fewer people were attending auction rooms, audience numbers had not noticeably declined.

 

Murray Smith

 

Tourism revives and the holiday-home market surges

Even as many predict falling house prices, the high-end property and holiday-home markets appear to be moving in the opposite direction.

Even before the pandemic, New Zealand accommodation websites carried large numbers of Airbnb listings. Their high rental returns attracted many people hoping to share in the financial benefits of the country’s growing tourism industry.

 

The pandemic disrupted the economy for a time and reduced investment activity. But as more people adapt to the “pandemic new normal” and China reopens its borders, tourism and short-term holiday rentals in various destinations are expected to flourish again.

 

The latest Bachcare data shows that as early as the beginning of December 2022, accommodation in New Zealand’s New Year hotspots was almost fully booked, with summer demand up 66% on the previous year. Short-term accommodation bookings rose 95% in Rotorua, 71% in Nelson and 51% in Taupō.

 

Bachcare said that while this put pressure on holidaymakers seeking accommodation, it was good news for homeowners renting out their properties.

 

Bachcare head of revenue Nick Peirce said the surge in demand was partly due to returning international visitors, who appeared increasingly interested in holiday-home accommodation.

 

“Our data shows that more overseas visitors are choosing holiday-home rentals, accounting for more than a fifth of our bookings during the peak season.”

 

Space and flexibility may be key reasons. Peirce said: “The feedback we receive from these international visitors is that holiday homes offer greater flexibility, allowing more people to stay in an area, particularly where accommodation is limited at this time of year.”

 

China is New Zealand’s largest trading partner and was its second-largest source of tourists before the pandemic. Its reopening may now bring fresh momentum to industries across New Zealand. What do you think?