Migrants climb the ladder
A Bayleys research paper says social changes have shaped the dynamics of property investment for many immigrants.
Shorter term, Chinese investors are finding it tougher to get their money out of China.
The changes come against a background of increasing cultural diversity with 39 per cent of Auckland’s 1.4 million population born overseas - encompassing 220 ethnic groups and more diversity than Sydney, London and New York.
The president of the NZ Chinese Association, Meng Foon, said in the Bayleys report that Chinese-born immigrants from the 1960s to 1980s often began their business life in New Zealand working in food outlets and factories but had been thrifty and over time acquired commercial property in Auckland.
Since 2009 a new moneyed class of Chinese immigrants had come to New Zealand, enabling them to buy commercial property more quickly than their earlier compatriots, Moon said.
The more recent migrants had tended to purchase shops and food outlets with existing tenancies, often in outer suburban locations which will become more developed communities in future, the Bayleys report said.
A recent Chinese government crackdown on money flowing out of China is making it tougher for smaller migrant investors to enter the New Zealand property sector.
Bruce Whillans, owner of Whillans Realty, said the stricter controls were a major hurdle especially for less sophisticated smaller investors and developers
They also faced tighter lending rules in New Zealand, IRD reporting requirements, higher construction costs, and stronger local currency.
However, corporates, stateowned enterprises and larger investors with more skills in negotiating the investment minefield were still able to transfer funds outside China, Whillans said.
They were seeking large residential projects and were prepared to build on a speculative basis, often with an eye on distressed development opportunities where projects had stalled or were in the hands of lenders.
Whillans said there were also many examples of land banking by Chinese investors.
His team had sold millions of dollars worth of commercial land at Albany that was yet to be developed.
While some Chinese investors continue to be interested in New Zealand, many have adopted a wait-and-see approach, according to Whillans.
‘‘This trend marks a notable change from the heady days of 2014 and 2015, when they were parking cash in property.’’
US investors have become a feature recently for real estate business owner Graham Wall who specialises in top end properties.
Over the past two weeks Wall has entertained well-heeled US buyers on helicopter trips around the South Island in the search for high country properties.
One of Wall’s guests included a journalist from the New Yorker, attracted by reports of renewed interest from US investors in New Zealand after the election of Donald Trump for president.
Meanwhile, the Bayleys report on immigrant investment preferences said Koreans tended to favour liquor stores, Indians like restaurants where they employ family, but South Africans have been hit by a slump in their currency, and the few Russian investors chased industrial yields.
Bayleys national director John Church saidmotels were popular because they fitted within the government’s income-producing investment criteria, and had onsite owner or manager accommodation.