Buying property in New Zealand

Often cast as the poor cousin of neighbouring Australia, New Zealand has more to offer Expats than many would have you believe.  The country is renowned for its geographical isolation with Australia over 2000 km away, and New Caledonia, Fiji and Tonga also substantial distances away form the country.  When you consider the obvious high than average cost of transport to and from the country, it is quite surprising that the authorities have been able to build a viable economy and a growing tourist trade.

The country has two main islands, the North and South islands, together with smaller islands located nearby.  The country itself is approximately the size Italy and Japan, although the terrain and landscape are obviously very different.  Both of the main islands have a mix of mountainous regions, evidence of volcanic activity and vast plains that support the country’s important agricultural industry.

New Zealand is also well known for its Maori ancestry, which dates back hundreds of years. It has become a major selling point for New Zealand with tourist flocking to sample the culture and beauty of this expanding country.  The New Zealand rugby team, the “All Blacks” have proved to be a very useful promotional tool for the country’s tourism industry.

New Zealand is well supported by an economy that is still growing, and while the country depends to a large extent on the export market, they have a vast array of international trading partners, thereby reducing their dependence on any one country or currency.  Unemployment is currently at an all time low.

An expat glowed with superlatives as they chose to live in New Zealand in a post at the New Zealand Expat Forum last September 14, 2009:

I moved to Papamoa from Ireland almost 10 months ago. I am here with my partner and our 6 year old daughter. You have decided to go to the nicest part of nz in my opinion!!!Really close to everything.Lots of stuff to do!Papamoa is approx 20min drive to Tauranga and 10min to Mount Maunganiu (beautiful). The next closest place to live would be Te Puke, my partner works there. Te puke is less built up than Papamoa and parts of it are quite rural.Its main street has everything you would need, bank, postshop, cafes etc. Te Puke is a 10min drive from Papamoa and therefore the beach.

I honestly think that you should give Papamoa a go, there is alot of houses but some of the cul-de-sacs are just beautiful!And there are loads of parks for the kids!And everywhere is within walking distance of the beach. Where we live, there is a river and a beautiful walkway through it, its such a quite neighbourhood!

Some more info, the schools your children go to will depend on where abouts you live! Some schools are better than others. I have exact info on this if you want it email me. We are Catholic so we sent our daughter to the Catholic school in the Mount which doesnt take into account where you live-there was fees but not much.

Rent prices- we pay $400 wk for a new 4 bed house with heat pump(v import to get house with heating!) Generally a house over $350 wk would be good.

Also you should type in Gravatt Road into google earth and have a play about with it to get a feel for the area ( Fashion island is on this road-this is where you will spent your saturdays while the other half is mindin the kids!)

Contents: Property Market Performance in New Zealand | Property Costs in New Zealand

Property Market Performance in New Zealand

The New Zealand economy and housing market continues to power ahead, despite the recent rise in interest rates to 7.75%  – very high by historic standards.  The problem is that the attractive interest rates are attracting speculators who are buying the New Zealand currency, which has indirectly squeezed house prices higher.

Even though the country is in great condition for the future, there are concerns that an economic “bubble” is forming, which may be “popped” at any time.  Inflation should soon come under control as interest rates start to hit home, although as and when rates peak, the so-called “hot money” which has recently entered the country may well be repatriated.

Strong expected economic growth of 2.7% for 2007 and 1.6% for 2008 are coming back to more manageable levels, although the trick will be to manage a phased withdrawal of speculators from the currency market. The financial crisis of 2008 has only dampened the market a little, with many properties put up for sale. The projections though are very positive as the market listings continue to grow.

Overall, the New Zealand property market is still booming, have risen by over 10% a year for the last 3 years. An uncomfortable inflation rate is the only major concern as the unemployment market may come under pressure from increased materials prices and pressure on wage inflation.  However, the economy is still fairly young and unemployment is still low, with foreign nationals being encouraged to relocate and fill gaps in areas of the employment market.

While in the short term there are concerns about a “correction”, the New Zealand economy is well positioned for the future, as is the property market that still offers attractive long term potential.

Property Costs in New Zealand

The process for buying a house in New Zealand is fairly straight forward, although costs can vary from area to area.  To complete a transaction the following information is required:

- An independent valuation
- A title search
- A building inspection
- A LIM report (local council report specify any special features, etc)

Most home buyers are asked to pay a 10% deposit against a potential house purchase, which ensures that “time wasters” are not encouraged to become involved in the process.  However, bearing in mind that not only fixed price, though auctions are popular in New Zealand, this is not always possible.

The cost of properties in New Zealand is much lower compared to Europe and North America due to the lower cost of land and construction costs. An expat though shared a word of caution in a post at the New Zealand Expat Forum last July 12, 2009:

Be careful though – make sure the place you choose is where you’ll like. There are an awful lot of place where you’ll get a 4 bed place for what seems like a bargain price – but you’ll suffer a huge culture shock and will probably find getting work difficult.

Tagged as: Buying property in New Zealand, property