'Perfect storm' creates strengthening foreign interest

David Bayley. Photo / Supplied

To meet the demands of a "perfect storm", Bayleys Realty Group is compiling a portfolio of commercial premises, businesses, residential homes and primary-production land for sale to take on an extensive roadshow to South-East Asia, Europe and the United Kingdom.

"New Zealand's safe food-chain supply, a pending multi-billion-dollar investment by the Chinese Government and an overheated Australian property market are three key factors behind a rise in demand for New Zealand real-estate assets by off-shore investors," says Bayleys executive director David Bayley. "A perfect storm of global social and economic conditions has arisen."

Properties already in Bayleys' Global portfolio include tourism and hospitality ventures in Taranaki, the West Coast and Central Otago, a farm in North Canterbury, two vineyards in Marlborough, residential homes in Auckland, Queenstown, Taranaki and Northland, a retirement village in Counties and a variety of commercial and industrial properties.

The international roadshow across immigration expos and property-investment seminars begins in Zurich, Switzerland, on July 6 before heading to Leeds, London and Manchester. David Bayley is handling the Southeast Asian section of the Bayleys Global campaign with a promotional trip to Shanghai, Guangzhou, Singapore and Hong Kong scheduled for August.

He says the company has traditionally focused on British immigrants to spearhead its Northern Hemisphere marketing activity. However, events of the past three months had created a new set of and opportunities, with demand following suit. He says "new-generation" factors are now underpinning the increasing interest in New Zealand real estate and businesses. These factors include China's enormous sovereign wealth fund, with the China Investment Corporation setting aside $6 billion of its foreign-exchange reserves to invest in New Zealand assets. Individual Chinese investors are also investing increasingly in overseas property.

The Economist last month identified the Australian residential property market as the most overvalued in the world, estimated to be inflated to about 56 per cent.

With Australian residential and commercial-property market values benefiting from Asian investment, analysts believe it is only a matter of time until large-scale profit-taking sell-offs commence in Australia - and the resulting funds begin heading to New Zealand to take advantage of a favourable exchange rate.

Bayley says New Zealand's challenge is to balance a controlled exchange of farms, commercial properties, home and businesses ownership so the best interests of the country are retained in the long term, while multi-billion-dollar investment opportunities are used to assist New Zealand out of recession.