Hard to say... Household income and home prices average about 100k & 1million respectively in NZ. That makes sense at ultra-low interest rates of -1 to 1%, but not at the rates of NZ (>3-5%). Loan-to-income probably averages about 5x, but price-to-income is about 10x so I'm not sure what feeds the difference. Doubt people are sitting on 50% downpayments. But I wouldn't be surprised if there's a ton of generational wealth going from parents to kids.
Averages can be a bit misleading as you'd compare average home-owner prices to average household (owner or renter) income. The incomes of owners are typically above this average, for renters below the average, so the price to income is probably not 10x but a bit lower.
Second, I wouldn't be surprised if a lot of wealth flowing into the market is not sourced from overseas wealth by immigrants. As in, the source of the wealth is foreign, but it's spent by people who have migrated to NZ.
https://en.wikipedia.org/wiki/List_of_countries_by_net_migra...
You can see NZ sits in the top 20 in the world in net migration rate. The net migration rate (net, i.e. with the short-term workforce filtered out) probably consists of relatively high-income and high-wealth expats.
Second it seems like home ownership is decreasing in NZ lately. Perhaps the rental market is becoming bigger and homes get bought up by investors. Means less supply in the home owner market. That typically pushes prices up strongly, too. (good for the rental market, bad for homeowner market).
Lastly there's a slight increase in average home sizes. Naturally that should increase prices without it necessarily meaning certain floor space of housing is more expensive.
Still, these figures are quite crazy. I'd make more sense if they were 30% lower. I'd also be quite concerned as NZ seems to run off of variable or short-term fixed interest contracts... corrections and volatility is much bigger in such markets, and given mortgaged RE is by definition leveraged, it can really wipe out large chunks of wealth.