Practical tips for buying in New Zealand
1. Are you eligible to buy property in New Zealand?
In August 2018, the New Zealand government went ahead with their plans to ban foreign owners of new homes, in an attempt to lower escalating property prices in the country, which have gone up, on average, by 60 percent in the last ten years. In Auckland, the largest New Zealand city, prices have increased by more than double.
Recent figures show that more than three percent of property buyers in New Zealand in the first quarter of 2018 were from abroad – this figure has increased significantly in some of the most expensive areas of New Zealand, where buyers are looking for security and good returns on their property investment.
Domestic home ownership has declined in New Zealand and there is a property shortage, so the government hopes that these drastic measures will improve the situation.
But what does it mean for property buyers from abroad? Foreign property owners already in possession of a New Zealand property will not be affected. Under the new law, overseas buyers will be able to own up to 60 percent of units within the larger, new build apartment blocks.
For more guidance and information on how this affects your situation, get in touch with our New Zealand property experts.
2. Why do you want to buy a property in New Zealand?
You will need to know your exact reason for purchase before you begin the process of looking for property in New Zealand – whether for a holiday home, somewhere to move to permanently, or perhaps an investment property. Knowing this in advance shapes the purchase process, for example, whether you need to look into rental returns in the area, or if the climate will be a key consideration. In recent years, New Zealand has become the go-to choice for investment and emigration, thanks to a thriving economy and an impressive choice of property and business investment opportunities.
3. Can you stay in New Zealand?
New Zealand is one of the countries with strict visa rules if you wish to move to the country permanently or to spend a long period of time in the country. We recommend speaking to an immigration solicitor in advance to make sure that you follow the correct protocols, as well as consulting a visa specialist to see which types of visa you may be eligible for.
4. Have you thought about where in New Zealand you want to live?
Whether you are investing into Auckland’s thriving, multicultural, commercial hub; exploring the fertile lands and shores of the Bay of Plenty; or taking advantage of the wonderful wineries and vineyards of Hawke’s Bay or Marlborough, New Zealand has much to offer.
While New Zealand is not the biggest country in the world, there are a number of different options for places to live. There may important personal factors that affect where you choose to live in New Zealand – such as health and lifestyle, family demands, the type of neighbourhood in which you would like to live, the cost of properties and cost of everyday living. It’s a good idea to conduct some research about these areas in advance.
5. Have you set a budget?
You will need to know exactly how much you can spend in advance before you begin looking for your property. This will not only need to include the cost of your property but also the additional costs that are likely to crop up along the way – such as legal fees and more. You will also need to keep an eye on the fluctuating exchange rates with the New Zealand Dollar and how this will affect the amount of money you have in New Zealand to spend.
Your property purchase in New Zealand and, if appropriate, any subsequent emigration, will require significant international money transfers, which will be affected by the movements and often-seen volatility of the currency markets. Global economic and political events shape these currency markets, moving them both up and down by the second, the minute, the hour… so you will need to ensure you have an effective strategy in place to protect your investment and any international payments you need to make.
6. Are you aware of any extra charges and hidden fees that you may need to pay?
The additional costs involved in purchasing overseas property and/or migrating to New Zealand must be taken into account at the beginning of your research and factored into your overall budget from the outset. These will include things such as legal and real estate agent’s fees, stamp duty, transfer fees, insurance policies to cover your property, vehicle, healthcare, life insurance and much more.
Don’t forget the effects of political and economic uncertainty on currency markets and how this can chip away at your finances if you don’t take steps to protect any international currency exchange. Consult a currency expert as early in the New Zealand research and planning process as you are able.