Whether you love fabulous weather and rare wildlife, are into extreme sports or a loyal fan of Lord of the Rings, New Zealand has something special for everyone. With major cosmopolitan cities like Auckland and Christchurch balanced against backdrops of staggering geographical beauty, it is not surprising that New Zealand considers thousands of residence applications each month from expats all over the world who are eager to put down permanent roots in such a special country.
This article will cover the process and cost expectations of buying a home in New Zealand as a non-resident.
Understanding the home-buying process in New Zealand can be challenging at first for migrant homebuyers. The first step in owning a piece of New Zealand real estate is to build a team of experts who can help you throughout the process. That team should include a lawyer or conveyancer, a New Zealand real estate agent, a mortgage broker, an insurer and a property inspector. The following sections will highlight important home-buying steps and documentation considerations for non-residents looking to buy in New Zealand.
Unless you hail from neighboring Australia, you may face some unique challenges when starting on your path to homeownership in New Zealand. Australian residents or citizens do not need special permission to buy in New Zealand, but they must check with their intended area’s local council to learn what buying restrictions, if any, may apply to their region of interest.
For non-residents, citizenship, usage intent for the property and even the type of property will determine your access to purchasing a New Zealand home. The Overseas Investment Act (OIA) implemented more restrictions on foreign buyers as a means of driving down home costs for native New Zealanders and ensuring that the housing market was most accessible to Kiwis themselves.
The good news is that recent amendments to the OIA have made the application process for becoming an investor in New Zealand a bit less intricate, and this is opening up new pathways for expats to become New Zealand homeowners.
The median price for a New Zealand home recently tipped over the NZD$900,000 mark. Property prices have been affected by the pandemic and a host of international investment concerns in recent years.
Like other places, property costs in New Zealand can vary wildly from region to region. A single-family home in a bay city like Tauranga, for example, will be higher priced than the same sized home in a more sparsely populated area, such as Taranaki. You should spend an adequate part of their initial search comparing property values in different areas.
Once you have conducted initial research and determined which particular type of property will best suit your needs, it is time to align your search for a New Zealand home with your budget. Like most everywhere else, New Zealand house prices vary by geographical area, proximity to major cities and access to cultural amenities.
The valuation of any New Zealand home will be displayed in real estate advertisements in one of three ways:
All three reflect valuations utilized by the local council to calculate property taxes and may not reflect the home’s true market value. The Quotable Value website can help you obtain more real-time valuations based on the actual sales of New Zealand homes, not just their tax assessment.
Another vital factor to consider is the projected strength of the New Zealand dollar (NZD) at the time of your planned purchase. While the NZD is traditionally a fairly strong currency in relation to countries with equivalent economies, everything from property prices to the types of housing available to non-residents can fluctuate.
A critical first step is to secure lending if you do not plan to make a full cash payment for your New Zealand home. Mortgages in New Zealand can be offered by traditional banks, specialized home loan companies and even building societies. It is advisable to employ a mortgage broker to assist you in finding the best loan, as these professionals have access to a variety of different types of lending institutions.
Foreign buyers will be expected to show strong credit history, proof of income and provide a decent-sized deposit. Most New Zealand lenders will also ask for proof of established residency status, an investor visa in progress and agreement of an intent to reside in New Zealand for the majority of each calendar year.
New Zealand law requires all real estate agents to be licensed and registered through the Real Estate Authority (REA). This governing body provides an excellent resource for future New Zealand homeowners to check out real estate listings, confirm an agent’s credentials or inquire about other agencies in an area of interest.
Foreign buyers looking for a real estate agent in New Zealand should understand that real estate agents work exclusively for the seller. Sellers pay for the services of the real estate agent at the time that the property sells.
While all licensed real estate agents in New Zealand are strictly bound to fair and honest treatment of all consumers by the Professional Conduct and Client Care Rules set forth by the REA, non-resident buyers should not limit their access to just this one agent. It is advisable to ask to speak to another agent assigned to the listing you are interested in, keeping in mind that all agents will still work for the seller.
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Whether you have your eye on a rental property in the Waikato District, have plans for a trendy townhouse in Wellington or are trying to decide between several family homes in Christchurch, there are a variety of sales methods under which your new home might be listed. The following three are the most common:
Adequate and informed legal counsel is advisable for any person buying a home. As foreign buyers are likely to know less than residents about the ins and outs of the New Zealand real estate, getting a lawyer or conveyancer to assist your purchase is essential.
The primary difference between a lawyer and a conveyancer is that lawyers handle a broader scope of legal issues, while conveyancers specialize in the transfer of ownership. Investing in the services of a legal professional is wise not just for the time and energy it will save, but also for the prevention of problems that could arise down the road due to any oversights, which can be costly.
Conveyancing and legal practice in New Zealand, like real estate, are subject to professional certification. You can start at the New Zealand Society of Conveyancers or the New Zealand Law Society to find a recognized, reliable representative in the legal field to safely assist you in becoming a New Zealand homeowner.
Due to free trade agreements, there are special rules for Australians and citizens or permanent residents of Singapore who wish to make their homes in New Zealand. Most everyone else will have to go through the standard resident visa application if they have not done so before purchasing their New Zealand home.
In general, it can be difficult for non-residents to buy a home in New Zealand if they have not achieved residence yet. An alternative method is to pursue an investor visa. Buying or building a new residential property is one way to apply for an investor visa. Keep in mind, though, that you will need special approval from the New Zealand Overseas Investment Office if the property is built on a plot of land larger than five hectares, is larger than 2,000 square meters in size, or is worth more than NZD$10 million in value.
No matter if you are already narrowing down a list of potential conveyancers, Relocate can help with your efforts to move to New Zealand. As an independent marketplace, you can browse Advisors that can provide informed answers on any question or concern you have regarding your New Zealand relocation and home purchase. Connect with a qualified Advisor on Relocate today and get that much closer to calling yourself a Kiwi.
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