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Billionaires' bolthole: how New Zealand became an escapee's paradise

The Guardian logo The Guardian 17/02/2017 Eleanor Ainge Roy in Wanaka

Mountains of the southern alps, reflected in the calm waters of Lake Wanaka, South Island, New Zealand. © imageBROKER/REX/Shutterstock Mountains of the southern alps, reflected in the calm waters of Lake Wanaka, South Island, New Zealand. When weary hikers stop for a thermos of tea and a sandwich on the sheltered beach at Damper Bay on the fringes of Lake Wanaka, many feel they’ve arrived in paradise.

The hilly outcrop covered in golden tussock and native trees boasts uninterrupted views, across sometime placid waters, of New Zealand’s snow-capped Southern Alps.

It is an ancient landscape imbued with a natural sense of drama, where the stars blaze bright every night and the nearest town has no traffic lights. At 18,000kms from London and 23 hours by plane from New York, you are reliably at the end of the world – but also an eight-minute drive from a supermarket that stocks duck confit and chilled Veuve Cliquot.

“It’s in the back of everybody’s mind at the moment. If there are, shall we say, changes, where can we go?” says Michael Nock, a Hong Kong-based hedge-fund manager who has a luxury, multimillion-dollar bolthole in nearby Queenstown.

“I researched this problem dispassionately and settled on New Zealand … it is a small community that has the ability to be self-reliant, with a rule of law based on the English system. And it is stunningly beautiful – it ticked all the boxes. ”

Walking along the eastern shores of Lake Wanaka, you pass the buzzing yacht club and Eely Point picnic grounds, where toddlers paddle in the freezing shallows, chilled year-round by glacial runoff.

Next, a long stretch of luxurious homes known to locals as “millionaires’ row” sprawls for kilometres along the lake’s edge, snaking around Beacon Point.

These multimillion-dollar homes are reliably kept in immaculate condition – with tightly clipped green lawns and filtered duck ponds. But month after month, sometimes year after year, many of the windows stay shuttered against the mountain views, and the doors tightly bolted.

According to the 2013 census, more than half of Wanaka’s 2,781 homes are unoccupied.

“We’ve got quite a lot of billionaires in the district,” says Queenstown Lakes mayor Jim Boult, whose region is home to just 1% of New Zealand’s 4.5 million population.

“There are a number of billionaires and many multi-, multi-millionaires. In the main they are enormously valuable to our district, they come to our town and spend enormous amounts of money on their property and employ lots of people. In general, they are significant contributors to good works in the community.”

Driving to the world-heritage listed Mount Aspiring national park from Wanaka has become a road-trip through the property portfolios of the global elite.

“There are a number of people who want to create a bolthole in the southern hemisphere, that’s away from some of the problems facing the western world,” says Terry Spice, the managing director of Luxury Real-Estate New Zealand, who has sold at least one property to a concerned American post-Trump.

“I would say there has been a significant increase in inquiry, but it is not just from the US. The situation in the US is making people elsewhere consider their options, and how their part of the world might be affected.”

At the beginning of the Wanaka-Mount Aspiring Road is Trade-Me founder Sam Morgan’s NZ$25m (£14.4m) Hillend Station, on the flanks of Mount Alpha.

To the left is property owned by Peter Thiel, the billionaire PayPal co-founder and Trump adviser who controversially gained New Zealand citizenship, allowing him to buy sensitive land without overseas investment office approval.

Four kilometres along, in Glendhu Bay, is Motatapu Station (NZ$21.5m). For many years it was the high-country retreat of pop star Shania Twain, and is still owned by her ex-husband, South-African record producer Robert “Mutt” Lange.

“I started designing a homestead for us shortly after we bought it and began putting my heart, soul and dreams into the plans,” wrote Twain in her memoir From This Moment On.

“I dreamed of riding horses across the vast plains, along winding riverbanks and through golden tussocks in the sharp, beaming sunshine of the land of the Kiwi.”

For sale signs dot either side of the narrow, two-lane road, advertising luxury, multimillion-dollar properties on land that for decades prior has been the stomping ground of shepherds, sheep and locals picnicking on the lake’s sandy shore.

Luxury real-estate and land for sale on the Wanaka-Mt Aspiring Road.: Luxury real-estate and land for sale on the Wanaka-Mount Aspiring Road. © The Guardian Luxury real-estate and land for sale on the Wanaka-Mount Aspiring Road. With a NZ$30m private hospital in the pipeline, international airport and a plethora of pampering options (there are more than 40 hair and beauty salons in the region, and dozens of vineyards), the Queenstown Lakes district has long drawn the admiration of the world’s privileged.

But in an unpredictable post-Brexit, neo-Trump world, their interest has cranked up a notch, and some locals are growing concerned at being engulfed by exceptional wealth, turning their once egalitarian farming towns into part-time playgrounds for the moneyed few.

While prime land is gobbled up by the mega-rich, community groups such as the Residents Association are on “the verge of collapse”, according to Wanaka locals, because of a lack of volunteers and funding.

“We’ve only got $7,000 in the bank and we’re battling businessmen who can spend millions to get whatever they want,” says Julian Haworth, secretary of the Upper Clutha Environmental Society for the last 22 years.

“It is almost impossible, all we have are our brains and our local contacts and our knowledge of the resource plan. That is our only advantage.”

Haworth locked horns 10 years ago with the then-owners of Thiel’s Damper Bay land, and was successful in reducing the approved number of building sites from six to one.

New Zealand’s national hiking trail – the Te Araroa trail – runs alongside the lake boundary of Thiel’s property, and the environment group was concerned the hiking trail and “exceptional natural landscape” of the region would be spoilt by gaudy, oversized mansions.

“Anybody who is linked to Trump is bad news … we want people who play by the rules, and believe in the philosophy of a fair-go for every New Zealander,” says Haworth, regarding Thiel’s citizenship

“Increasingly Wanaka is becoming a self-interested community that is motivated by money, and that is the polar opposite of the peaceful town I moved to nearly 30 years ago.”

Currently there are three high-country stations for sale in the Queenstown Lakes, with the overseas investment office (OIO) granting approval for the sale of Hunter Valley station to an overseas owner – reportedly an American businessman – on 9 February.

A second station, farmed by the same family since 1912, may also need OIO approval, although the agent could not confirm at this stage.

For overseas buyers wanting to purchase land or property in New Zealand, applying for an investor visa is relatively straightforward provided money is no object.

The investor visa stipulates that applicants can gain permanent residency in New Zealand by investing NZ$1.5m over a four-year-period and spending a minimum of 146 days in New Zealand for three of the four years of the investment period.

Another visa for the exceptionally wealthy is even easier, requiring applicants to spend a minimum of 44 days in New Zealand for the last two years of the three-year NZ$10m investment period.

Last year’s release of the Panama Papers also identified New Zealand as a significant tax-haven, with Panamanian law firm Mossack Fonseca identifying New Zealand as a good place to set up foreign trusts and avoid tax.

“It is bizarre, what has happened here,” says Randall Aspinall, a sheep farmer who lives in the the Matukituki Valley, 30km up the road from Thiel.

“Most of the foreign-owned stations are still farmed, sort of, but it is fairly easy to tell if it is a priority, or a sort of hobby,” he says.

“Overseas buyers purchasing our prime farming land has made it harder for Kiwis to go farming and stay farming, and it has pushed the price of farming land up hugely. I have strong reservations regarding the sale of the high-country farms, especially when it’s to people who are never home.”

After the 2008 global financial crisis, Hong Kong-based Nock hired a helicopter to scour New Zealand looking for a bolthole. He found one – in Queenstown.

At Nock’s place overlooking Lake Hayes, where he now spends three or four months a year, the quality of life is high and the pace gentle, something he values after decades as a self-described “global citizen”.

Since Brexit and Trump, Nock routinely fields queries from wealthy friends and colleagues interested in purchasing a “back-up” like his.

And he heartily recommends the Queenstown lakes, where he says you can easily “blend in”, and the Pinot Noir is among the best in the world.

But unlike the transient millionaires who are increasingly calling the region home, Nock has strong ties with the local community, which includes offering an art studio for locals to use, and a residency for international and Kiwi artists.

“My feeling is you want to be giving into the community, not just flying in and flying out,” says Nock. “Because then you really become a part of it, then you really put some roots down.”

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