When Foreign Investment And Short-Term Rentals Turn to Poison
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Who will buy this US$3.8 million New Zealand penthouse?
In the good old days, the wealthy used to scoop up gold and jewels and flee in the dead of night before poor, angry peasants descended upon their estates. Today, the million-dollar jewels are often red carpet loans where today’s décolletage is rented like a yesteryear billboard.
Hiding assets from pillagees, modern-day pillagers have offshore banks, blind trusts, LLCs and cryptocurrencies. Fleeing is now the purview of private jets to far-away lands – but the local residents in those faraway lands are getting ticked-off at being priced out of their own markets and they’re mobilizing.
Last month, New Zealand passed a law banning many foreigners from purchasing existing homes. The legislation was part of a promise during Prime Minister Jacinda Ardern’s campaign in 2017 to reduce the country’s skyrocketing housing prices. Earlier in the year The New Yorker published a story about super wealthy Americans purchasing New Zealand real estate as a hedge against potential political or nuclear Armageddon – nicknamed “apocalypse insurance.”
Why New Zealand? It’s a very remote first-world country in the southern hemisphere that’s inoffensive in global politics. Should a nuclear war break out, it will likely be in the northern hemisphere, where global wind patterns would keep the fallout well north of New Zealand (at least that’s the hope).
