International
If you are not a New Zealander, the property purchase process in NZ can be a bit perplexing. If this rings true for you, we hope that you’ll find some of the information below of value.
We've outlined below some of the questions that we commonly get from international purchasers on buying property in New Zealand.
Please make sure you contact us if we can help with further questions.
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Not only is the Coromandel Peninsula a beautiful place to live offering an outstanding lifestyle, but buying and selling property in New Zealand is a surprisingly simple and cheap process. There is no capital gains tax, no stamp duty, no wealth tax and no inheritance (death) duty in New Zealand. Isn't that reason enough to move to the Coromandel Peninsula and buy some property?
What's the process for buying property in New Zealand?
Many international purchasers are surprised when first buying property in New Zealand how easy the process actually is. New Zealand operates a Torrens system which ensures a smooth and simple process for transferring property ownership. The government also guarantees title on every property in New Zealand. There is no gazumping, chain of contracts or other such intricacies. It is all now done electronically and any interests registered on the property (such as a mortgage or caveat) are easily searchable and identifiable.
Once you have agreed the conditions of the sale with the seller (such as price, time frame etc), this is drawn up in a contract. A contract may have a few conditions to be met (eg. you may need to get a valuation to get a mortgage, or want to get your solicitors approval of the contract). Once these conditions are met (typically within 5-10 working days) the contract goes unconditional. A deposit is then payable (generally 10% of the purchase price) and both parties are committed to the sale. Once the agreed 'settlement date' is reached the respective solicitors confirm all terms have been met and that there is clear title, the property 'settles' (ie. you pay the remainder of the purchase price and in return receive the keys for your new property!). It really can be as simple as that!
How long will it take to buy a property in New Zealand?
It depends on the circumstances of the seller and what you can negotiate as a purchaser. Once you find the home you would like to purchase typically a sale can be transacted and you can be living in the property within 4 - 6 weeks. Many people who move to New Zealand choose to take short term accommodation (eg a serviced apartment or short-term lease) to give them a couple of weeks to have a good look around before they buy. Other people visit New Zealand, find a home they want to live in, purchase the property with a long settlement date (see above) of perhaps 3 months, then return to the UK to pack up and get themselves ready to move into their new home when they first arrive in New Zealand. It's really up to you as to what will work best for your circumstances.
How much should I expect to pay for a home in New Zealand, and Coromandel specifically?
Prices vary considerably around New Zealand, and indeed even within the same suburb of the same town. Generally speaking you get a lot more for your money in New Zealand than if you were living in the UK, particularly taking into account the strength of the British Pound, as an example. A good way to gauge value is to search for some property on this site and look at the price indications given.
You can find latest residential research reports, which provide some great information on what is happening in the property market, on our research website www.bayleys.co.nz/research.
Why aren't prices clearly indicated on all property for sale?
As just mentioned, in New Zealand there can be significant variations in property value from one house to another within the same street, let alone within the same suburb, town or city. For this reason it can be difficult to put a set price on a property, and therefore often agents and sellers would rather let the market decide what the property is worth. Many properties are therefore marketed without a set-price, through a method such as auction, tender or expressions of interest. Don't be put off if you see a property you like that doesn't have a price - simple email or phone the agent marketing the property and ask them for a 'price indication' for the property. They will typically quote 2 or 3 other properties that have recently sold that are comparable that will give you an indication of the market value of the property. If you want to proceed further you can then get a registered valuation which will give you a more concrete indication of property value to ensure that you pay fair market value.
What legal protection do I have?
New Zealand has straight-forward real estate and contract law legislation that generally ensures parties get a fair deal. A good solicitor is highly recommended and we will be able to recommend one for you. When you enter a contract, standard clauses such as a building report, property valuation, finance clause and solicitors’ approval can help ensure that you're buying what you think you are buying. Given the simplicity of the purchase process in New Zealand legal fees are typically much lower than charged in the UK for example.
How do I go about buying a property in New Zealand?
The web is a great place to start your search process. Use the search function on the right hand side of this page to narrow down your criteria and find some suitable homes. You will undoubtedly have questions on the homes, don't be shy emailing or phoning the agents marketing the properties. They are here to help you with the process. As a purchaser there are also no fee's payable to agents for this help - estate agent commission in New Zealand is typically paid by the seller.
What should I do next?
If you don't have a set time-frame yet … use the web to get a feel for the sort of properties on the market and what they are worth. Have you visited New Zealand yet and do you know where you would want to live? The web is a great source of information.
If you're within one year of arriving in New Zealand …now is really the time to start doing some homework and getting a good feel for the market. Time is still on your side. You may want to go on our mailing list to receive eNewsletters each month including research information on property prices and the latest properties as they come on the market. Click on the ‘eNewsletter’ button to register now.
We're here to help, so please feel comfortable giving us a call!
How easy is it to borrow money to buy property in NZ?
The finance sector is a competitive industry in New Zealand. As in the UK there are several factors that will determine the maximum amount you will be allowed to borrow, these include: o the size of your deposit, o your household income, and o the type, condition and location of the property you wish to purchase Most lending institutions will lend to a maximum of between 90% and 95% of the market value of a residential property and under certain circumstances it may even be possible to gain approval for 100% finance. Deposit requirements can differ between lending institutions and also across property types. As a guide, most lending institutions would require that all financial commitments should not exceed one third (approximately) of your gross income. If you and your partner are buying the property together then the bank will take into account your combined incomes. Lending institutions will certainly consider applications from overseas investors and non-residents, although the amount lent may be less. Lenders will also normally require a New Zealand representative, normally a solicitor, to hold power of attorney so that they may act on behalf of the client if required. There are various types of loans possible in NZ ranging from a table loan, interest only loan, revolving credit etc, and can be either floating or fixed rate.
We hope that this has answered some of your questions. If you'd like to know more or find out about specific opportunities in New Zealand make sure you contact us, we're here to help.
