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 an array smaller islands close by.  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 which support he countries important agricultural industry.  

New Zealand is also well know 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 which 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. 

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 is indirectly squeezing house prices still 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 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 which 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, but auctions are popular in New Zealand, this is not always possible.