Buying Property in New Zealand
As with Australia, New Zealand is too far away from the UK to attract holiday homebuyers, so the market is firmly aimed at people emigrating, possibly to retire, to enjoy the laid-back lifestyle, stunning scenery and good wine. Economic growth is attracting buy-to-let investors in the three major cites though, Auckland, Wellington (the capital) and Christchurch.
GeographyThe two major islands, North and South Island, are long and thin meaning that there is a good range of climates to choose from. At the top end of the North Island, sub-tropical greenery inland gives way to dramatic coves and beaches, while at the bottom of the South Island the climate is similar to Scotland but with hotter and more reliable summers. Both islands offer winters cold enough to enjoy skiing in their inland mountains.
The spectacular scenery features in many television shows set in the past and was seen in ‘The Piano’ and ‘The Lord of the Rings’ which brought worldwide attention. Slightly larger than the United Kingdom, but with a lot less than a tenth of the inhabitants, New Zealand is the place to go to seek peace and tranquillity.
Auckland and Wellington are the places to be for business, with Christchurch, the place most like an English city, and the Bay of Islands in the far north, popular with retirees.
EmigrationObtaining the necessary permits to emigrate can take a very long time to process, although certain skills that the government decide they are short on (the list changes quite frequently) can be fast-tracked under the Skilled Migrants Category (SMC).
Overseas buyers, as opposed to those seeking residency, face restrictions on how much land or property they can buy, but these are only relevant to large-scale developers, not individuals purchasing an apartment.
Purchasing ProcedureNew Zealand has a straightforward buying process that, to the joy of English and Welsh buyers, prevents gazumping. Once a price is agreed, an offer is made in writing, subject to surveys and mortgage approval, and the buyer pays a ten per cent deposit, which is held by their solicitor. Assuming no hiccups, up to three weeks later contracts are signed, and from that point on they are legally binding, meaning that neither the buyer nor the seller can withdraw from the sale. The buyer can then normally move in after a few weeks while both sides make arrangements to move, meaning that a sale is very often completed in a month.
There is no stamp duty in New Zealand, or capital gains or inheritance tax. The only extra costs will be lawyers fees of around NZ$1000, land registration at NZ$150 and a transfer fee of NZ$50. A building inspection report will be around NZ$400, but a full report costing up to NZ$1000 is recommended, as there have been problems with rot and insect damage to the timber frames since the use of environmentally damaging preservatives was restricted. The New Zealand dollar usually hovers around a third of a pound.
Targets For InvestorsFor the overseas investors there are a number of developments where guaranteed rental returns are offered, usually in the north of the North Island or in the area surrounding Queenstown, a ski and adventure tourism area surrounding the large Lake Wakatipu in the South Island, not far from the stunning fjords on the west coast.
Capital growth has averaged 10% each year across New Zealand over the past few years, and despite a relatively high interest rate, a shortage of property is keeping prices on the up.
New Zealand has expressed a desire to grow the population to make the economy more influential in the Pacific Rim, and population is up half a million on twenty years ago.