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New Zealand is famous for its clean, green image, with picturesque mountains and crystal clear waterways.
New Zealand is also a dynamic first-world society with sophisticated cities and a vibrant arts and cultural scene. The index of economic freedom (complied by the Wall St Journal) ranks New Zealand third out of major OECD nations. This takes account of openness of trade policy, tax rates, monetary policy, wages, unemployment, inflation levels, investment flows and regulation.
The New Zealand Government actively encourages overseas investors to invest in New Zealand, and it recognises the important contribution foreign investment makes to the development of New Zealand's industry, resources and community.
New Zealand has strong population growth due to its progressive immigration policy and birth rates. Many parts of the country have experienced housing shortages translating into strong tenant demand and price growth. This trend has temporarily paused with the upset in the world economy, however it is expected to continue with recent population projections by the New Zealand Department of Statistics forecasting up to 64% growth over the next 17 years. Auckland city is predicted to almost double its population in the next 40 years. For property investors, this represents outstanding potential growth in demand and return on investment. New Zealand's property prices are also relatively undervalued compared to the major countries of the world and its closest neighbour Australia.
There are many other benefits for investing in New Zealand including:
Tax friendly nation
New Zealand is an investment friendly country with no stamp duty, mortgage stamp duty, land tax, property purchase tax, nor capital gains tax. Some countries (eg. Australia), require property buyers to pay stamp duty tax, up to 3-4% of the purchase price!
Australian investors also receive excellent tax incentives from the Australian Tax department for owning New Zealand property. Those on the highest tax rate owning New Zealand property can get great tax benefits.
New Zealand also has comparatively high depreciation rates, making a New Zealand investment property even more tax effective.
A relatively untapped market
New Zealand's property prices are relatively cheaper than its major trading partners and most OECD countries. Offshore investment is in its infancy however the level of interest is increasing as more and more people hear about the fantastic growth and income opportunities.
High Rental Yields
Most large cities around the world experience solid capital growth but lack the rental returns. New Zealand boasts rental yields of 6-10% in its major cities which is fantastic for an investor seeking a capital growth orientated market whilst still maintaining a good cash flow position.
Great exchange rates
The New Zealand dollar has traditionally been weak against the Australian dollar, US dollar and UK Pound Sterling. These favourable exchange rates make New Zealand property even cheaper for overseas investors.
A Government that welcomes overseas investment
Buying from overseas is simpler than it sounds. The New Zealand Government has no major barriers for overseas property investors. The Government encourages foreign investment to help meet the growing population's increasing demand for property.
The Economy
The following graphs from the NZ Reserve Bank site www.rbnz.govt.nz/keygraphs
support the view of NZ as a sound and stable economy with low inflation, low unemployment, and increasing property value.
Managing Your NZ Investment
Just as important as buying the right property is effective and efficient management of the property. An investor not only wants to maximise long-term capital growth potential but also wants to maximise the weekly cash flow and tax position.
Once you have finalised your purchase, We can help you with the administration of your new property, including property management, insurance options, taxation requirements, valuations and financing options.
Property Management
Property managers are the most convenient way for an overseas investor to deal with all the day-to-day property management issues. Property managers promote and advertise your property, find and approve tenants, submit bond application forms and write the lease agreements. They'll also look after any maintenance issues such as repairs to a leaky tap or fixing the picket fence. They send frequent consolidated reports illustrating all cash inflows and outflows and take the hard work out of maintaining your property.
We can research and recommend a property management company for you, ensuring they meet the following criteria:
- Experience with overseas clients
- Below market vacancy rates
- Experienced staff members
- Competitive fees
- Comprehensive services
- Consistent rent reviews
Insurance
Insurance is relatively cheap in New Zealand compared to other countries. The main type of insurance cover required for an investment property is home contents, building and landlords insurance.
Legal Services
Buying property in New Zealand requires legal representation. Employing a lawyer who's experienced in all facets of New Zealand property law brings confidence to any buying process.
We understand that many overseas clients don't have access to a lawyer in New Zealand, so we have established relationships with several leading lawyers who understand your needs and concerns as an overseas property investor.
Lawyers offer independent advice on all aspects of property purchasing, ownership structures and associated issues. You will have the opportunity to have face-to-face, phone and/or email meetings with the lawyer of your choice.
One of the most critical parts of transferring ownership of property is the conveyancing. This process includes such things as checking land boundaries, ownership, zoning, sewage and that all buildings, renovations or extensions have council building approval and driveways right of ways. Our lawyers will review and prepare the agreement of sale and purchase prior to signing, along with all the other legal documentation associated with the purchase.
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