With affordable prices and few restrictions on foreigners, buying property in New Zealand can be a remarkably simple and straightforward process.
With UK property prices now nudging £200,000 for the average home, people are realising that by selling up and moving to New Zealand, they could afford to live in a superior property and enjoy a healthier, more relaxed lifestyle too.
You could swap the pleasure of living in that noisy block of flats or a semi with a poky garden for a substantial detached house Down Under, boasting a double garage and generous garden. Sea views and a bush setting are certainly possible, while if you fancy a swimming pool, a short walk to the beach and a couple of acres, you’ll find plenty of affordable options
available to you.
Because the average price in New Zealandis around £115,000, it’s incredibly easy to ‘downgrade’ price-wise but upgrade in property size and standard, and still have a substantial nest egg left over.
Step 1: Finding the right property to suit you
In the modern world, where you can have up-to-date information at your fingertips in an instant, you can complete quite a large amount of initial research via property websites. Once you establish what you wantand where you want it to be, along with any budgetary issues, it’s simply a matter of going online and searching until you find a property that ticks all the right boxes
One of the most well-used features on New Zealand estate agent Harcourts’ website (www.harcourts.co.nz) is the Google Maps system, which enables those looking for property to use high-quality satellite imagery to take a really good look at the various parts of the country, including where properties for sale are situated. This means you can see exactly how close you’ll be to the coast, the city centre, transport links and so on, making it a valuable yet easy-to-use resource.
For those properties that are of interest, you can email the property consultant who is managing about the sale and ask any relevant questions. It’s also quite common for UK immigrants to visit the country and spend some time actually visiting property in their chosen location. This is a great way to combine a holiday with your research, enabling you to really get a feel for a particular area, something that no amount of online searching will be able to provide.
However, it’s also not altogether unusual for overseas buyers to buy property based purely on what they’ve seen on the internet alone, and with the wealth of information available online, many see this as the hasslefree way of making a purchase, without the expense of having to visit New Zealand first.
Property styles
Kiwis often look for a good outside space when choosing a family home. Gardens and terraces are treated as another room to entertain friends, have barbecues and enjoy the long sunshine hours.
New Zealand property styles are very different to the UK. Many properties are built of wood, although brick houses are also common. The typical Kiwi home is on one level, while identikit terraced housing is often viewed as being ugly and undesirable. Flats (apartments in New Zealand) are rare outside the major cities and tourist spots.
Many new arrivals also find that homes can be chilly, due to the lack of double glazing and central heating. The key is to make sure you’ve got a ‘sun-trap’ property as this will cut down on your heating bills.
Step 2: Finding a lawyer
Like any professional, ensure you deal with a reputable individual and brand, and if possible, ask friends and family for a personal reference. Know exactly what you want that person to do and ensure they have the skills required, or can refer you to a colleague with the levels of expertise that you need for an efficient transaction.
Step 3: Finding an agent
Much like finding a lawyer, be sure to ask your friends and family for a personal recommendation for an agent. Failing that, you should always look at the reputable and well-established brands that can offer you the expertise that’s necessary to manage your property needs.
If you’re visiting an area in anticipation of living there, you should also take the time to visit open homes – in other words, properties on the market that are opened for public inspection for approximately an hour at a given time by the property consultant managing the sale.
As well as getting a chance to see what’s n the market, you’ll also meet a number of property consultants at these events, giving you the opportunity to get to know them
prior to seeking their assistance. An experienced real-estate company and sales consultant are the best combination you can have to ensure a superb result and a smooth purchasing process.
Step 4: Establishing a budget
This is obviously very much a personal issue based on your savings, income, property in the UK and your lifestyle. In New Zealand, you can contact an NZMBA member mortgage broker such as Mortgage Express (www.mortgage-express.co.nz) who can work through your options and look at what level of home loan you’ll qualify for.
This is a free service, and it’s one that we’d recommend you take advantage of, since a mortgage broker is often able to achieve much better home loan conditions and options with banks and lending institutes than you can as an individual.
Step 5: Managing the New Zealand dollar
Again, this is a personal issue that relies on a combination of factors, ranging from your income to your home loan, interest rates and general cost of living, which is dependent on
a huge number of factors, not least of which is where you plan to live and how you want to live. Our advice is to spend as much time as possible working out your budget so you
know exactly what you can and can’t afford to spend. Consulting a professional financial advisor might be a good idea at this stage for a more impartial view of your situation.
Steps 6: Surveys and background checks
No matter where or what you buy, one of the essential documents you must see before going ahead with your purchase is a Land Information Memorandum (LIM). The LIM contains information from the local council about a property’s zoning, boundaries, building consents and so forth.
Be aware, however, that while this is important in terms of ensuring you don’t buy unregistered property or one you can’t let should you choose to do so, a copy of the LIM costs anywhere between NZ$100 to NZ$400 (£38-152), which is quite expensive, particularly if you then decide not to buy that property.
One other significant drawback is that LIMs have been known to contain unreliable information, so in order to ensure that yours contains accurate details on the property that you’re considering, visit the local council’s building department to discuss it. You can ask for any additional information they have on the property, and it’s certainly worthwhile doing this because they’ll often have more details stored away on file than they’ve included in the LIM.
Another effective way to find out more about a house you’re interested in buying is to pay a fee to the government’s Quotable Value. For around NZ$5 (£1.90), QV will tell you the prices that other properties in the neighbourhood are selling for, and it will also inform you of the prices a house has sold for in the past.
A further NZ$50 (£19) will also buy you a hazard report, which is also going to include useful information that can help you decide on whether or not to purchase a particular property, making it money well spent.
Step 7: Restrictions on foreign purchases
Depending on whether you enter New Zealand on a short-term visa or a secure residency, this is going to have an impact on the type of property you’re able to purchase. There are very few restrictions on the type, amount or location of a property you can buy if you’re a resident in New Zealand. However, if you’re a non-resident, there are certain restrictions that will limit the type of property you can purchase.
If the property costs more than NZ$10 million (£3.52 million), consists of more than five hectares, or if the plot is made up of coastal land and is larger than 2,000 square metres, you’ll need to apply to the Overseas Investment Commission for approval to purchase. In these cases, it’s likely that permission will only be granted if you can prove that you’ll be adding economic value to the country.
Step 8: Completing the sale
Purchasing a property in New Zealand is a straightforward process and whatever type of property you decide to buy, you can rest assured that you won’t be gazumped, since
accepting a written offer is a legally binding. Once you’ve found a property that you like, you’re required to put in a written offer. This offer is subject to factors such as securing a mortgage, plus conducting all of the necessary searches and surveys that are required. If the offer is accepted, you’ll then need to pay a ten per cent deposit, which will be held by your solicitor.
If you work closely with professional advisors from your chosen lawyer, mortgage broker and property consultant, they’ll assist you in carrying out a smooth transition. The key is to work with these professionals first to establish the process so you fully understand all of the legal and other obligations from all sides, prior to finding a property to purchase.
Some properties, such as farm sales, are subject to various regulations and restrictions when it comes to overseas buyers, so it’s important that you understand all of the issues involved right from the start, otherwise you could end up wasting a lot of time, money and effort.
Once all the terms of the sale have been met by both the buyer and the seller, a contract will be signed. This is legally binding, and neither party can pull out of the transaction once it has been signed. It usually takes around three weeks from the time of signing until you can take possession of the property, and it’s unusual for the purchasing process to take longer than around a month.
Step 9: Extra costs
Buyers are responsible for all their own legal fees in New Zealand, as well as payments to any consultants they appoint, such as a property checking company or valuation firm. Again, your chosen professionals (lawyer, property consultant, mortgage broker and so on) will assist you with the process of any related costs, and spending money to secure the help of these professionals will often end up saving you money in the long term.
Appreciation rates
According to the Economist magazine, in the decade ending 2006, South Africa had the biggest house price increase at 327 per cent, followed by Ireland at 252 per cent,
Britain at 192 per cent, Spain at 173 per cent and Australia at 132 per cent. New Zealand came in at number 12 on the list with 94 per cent. At the other end of the scale, Germany was down by one per cent, Japan was down by 32 per cent and Hong Kong was down by 44 per cent.