The Auckland suburbs where overseas investors are scooping up land

Overseas investors have scooped up more than $123m worth of land in the Auckland region since September last year under a pathway designed to encourage house building.

The largest purchases were by Neil Group, a company registered in the Virgin Islands and reportedly owned by Malaysian and Singaporean investors.

In November, it notified the Overseas Investment Office (OIO) it had bought 13 hectares of land on Trig Rd in Whenuapai for $49m.

The company is building a 300 house development in Whenuapai and the latest purchase will be turned into an industrial and business park “supporting” the suburb.

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Neil Group controversially went to the Environment Court in 2019 to seek a ruling that would limit the noise generated by Whenuapai Air Base and prevent aircraft engine tests.

On its website, Neil Group outlines its strategy for obtaining land. It invites individuals or families with large land holdings to partner up with it in development projects for a share of the proceeds.

The Whenuapai purchase was done under a previously obtained “standing consent” from the OIO, which required the consent holders to notify the office once a land purchase had been made.

Investors who want to build residential developments can apply for consent under a pathway known as the “increased housing test”, but they are required to sell their holdings within a certain number of years.

Another company that has made such an application was Fletcher Residential, which is 55% Australian owned, 13% USA owned and 5% UK owned.

In December, it notified the OIO it had bought 0.7ha in Onehunga from Kāinga Ora for $7.6m.

It’s replacing state housing with 62 dwellings over three “super lots”. At least 30 have to be “affordable” KiwiBuild homes.

It’s not the only public land Fletchers has snaffled. It bought 4.27ha of former quarry land at 100 Morrin Road in St Johns from Eke Panuku, Auckland Council’s development arm. The price has been withheld under the Official Information Act.

It’s developing 204 dwellings, mainly terraced housing and apartments, to sell on the private market, but also 60 dwellings for retirees.

Buying up land for residential development and carving off a slice for “retirement living” is a trend that has emerged strongly within recent OIO notifications.

That’s because villages for retirees are treated differently under the rules, allowing overseas investors to continue to own and operate them.

Fletchers has done the same thing in Rosehill, where it has purchased 4.9ha for $36.9m, to be developed into 114 dwellings and another 60 unit retirement village.

Retirement village operator Metlifecare purchased 8.6ha of land on Jellicoe Rd in Pukekohe for $23m. It’s owned by the €9 billion Luxembourg based EQT Partners Infrastructure Fund.

Meanwhile, National Party housing spokesperson Chris Bishop has taken aim at overseas investment rules ahead of the 2023 election.

He told a crowd of 300 investors at a New Zealand Property Council summit that it was “just nuts that retirement villages have an easier ride.”

Bishop announced he has submitted a bill that would change the Overseas Investment Act to give “build to rent” housing developments the same privileges as retirement villages.

The bill would also give rented apartment buildings the same depreciation tax write-offs that commercial buildings have enjoyed under the law since 2020.