The Big Shift: What’s Driving Australian Capital to New Zealand?
While domestic commercial yields in Sydney and Melbourne sit in the low-to-mid 4% range for prime stock, comparable assets in Auckland or Wellington are offering 5.5–6.5%, even as demand and rent growth remain strong.
“We’re seeing a noticeable pick-up in trans-Tasman enquiries,” says James Partridge, Principal at a Melbourne-based private syndicate that recently acquired a multi-tenant industrial park in Manukau, south Auckland. “We got more scale for our dollar, less red tape, and a simpler deal structure. It's a no-brainer for our investors.”
The logic is straightforward. In New Zealand:
- There is no stamp duty on property acquisitions.
- Capital gains tax generally doesn’t apply to commercial property.
- The planning process, while still bureaucratic, is generally less onerous than in Australian urban centres.
- Supply constraints—particularly in industrial and logistics—mirror or exceed those of Australia, providing strong rental tailwinds.
And unlike other offshore destinations, New Zealand offers cultural familiarity, legal transparency, and close regulatory alignment with Australia. “It’s like investing in Australia, only less crowded,” says Partridge.
Case Studies: Australian Investors Making Their Mark
1. Macquarie Asset Management – Infrastructure Meets Industrial
Macquarie Asset Management has expanded into New Zealand, acquiring assets such as electricity distributor Aurora Energy and equity in ports and logistics hubs. Macquarie has also scoped out industrial precincts around Hamilton and Christchurch as 'growth corridors'.
2. Nick DiMauro – Private Wealth in Commercial Real Estate
Sydney investor Nick DiMauro has accumulated commercial holdings including suburban office buildings, high-yield childcare assets, and industrial warehouse space.
3. CBRE and Colliers Transactions Surge
CBRE’s latest New Zealand Capital Markets Review shows AU$2.1 billion in cross-border transactions in the last 12 months—nearly 40% from Australian capital.
Tax Treatment: A Trans-Tasman Advantage?
✔️ No Stamp Duty
New Zealand does not levy stamp duty on property purchases, improving returns on large transactions.
✔️ No General Capital Gains Tax
Capital gains from commercial properties are often untaxed unless the investor is trading for resale.
✔️ Simpler Structures
NZ assets are often held via local NZ companies, taxed at 28% on net rental income.
⚠️ Australian Tax Implications
Australia taxes worldwide income and gains. Capital gains from NZ property are taxable in Australia, but the 50% CGT discount may apply.
Strategic Sectors for Investment
🏭 Industrial: Auckland’s industrial vacancy rates are below 1.5%. Rents are rising across East Tamaki, Wiri, and Mt Wellington.
🏢 Suburban Office: Suburban hubs in Wellington, Hamilton, and Christchurch offer counter-cyclical opportunities.
🏨 Regional Hospitality and Hotels: Queenstown and Rotorua hotel portfolios attract Australian capital with yields over 7%.
Platforms Like DevelopmentReady and CommercialReady Now Bridging the Gap
Until recently, the biggest barrier for Australian investors was access. That’s changed.
Platforms like DevelopmentReady and CommercialReady showcase NZ-based development and commercial opportunities to Australia’s capital-rich investor base.
“We see it as a win-win,” says Rob Langton, Commercial Director at Ready Media Group. “New Zealand agents get access to deep capital pools, and Australian investors get access to a dynamic, under-the-radar market.”
The Final Word: Look East, Not Just North
In an environment of tighter returns, geopolitical risk, and market saturation, Australian investors don’t need to look to Singapore, the US, or Europe for diversification.
New Zealand is right next door, offering growth, clarity, and yield — without the noise.
And if the early movers are any indication, the wave of Australian capital heading eastward is just getting started.
Sources:
Property Council New Zealand: https://www.propertynz.co.nz/
CBRE New Zealand Industrial & Capital Markets Reports: https://www.cbre.co.nz/
Erskine Owen – Cross-border tax insights: https://www.erskineowen.co.nz/
New Zealand Inland Revenue (IRD): https://www.ird.govt.nz/
Australian Taxation Office – DTA: https://www.ato.gov.au
The Australian – Property & Investment: https://www.theaustralian.com.au/business/property
