Tips for Buying a Property in NZ: Why Invest in New Zealand Real Estate
It’s true that New Zealand is now in a recession because of the pandemic, but buying a property in NZ is still a good investment. This country was widely commended for its fast and rather strict response to the pandemic. While restrictions were harsh, New Zealand can be proud of how fast it stopped the spreading of the virus. This saved lives and gave the local economy a chance of faster recovery.
The NZ real estate market has definitely recovered. In fact, it was barely affected at all. Therefore, investors can still expect high yields from their New Zealand real estate assets. And the number of immigrants and expats coming to this country and in need of housing isn’t going down either. If anything, New Zealand’s response to the crisis served to prove that moving here is a great idea.
Why Now Is a Good Time to Buy a Property in NZ
The entire world is now struggling under a global economic recession. There is no arguing against the fact that every country, New Zealand included, will have a hard time recovering. As the scope of this crisis is unprecedented, it’s impossible to say how fast the recovery will progress.
That said, some countries definitely had more success in handling the pandemic problem. New Zealand is among those that were most successful. Therefore, even now it’s clear that the country will get back in the game fast, despite its GDP shrinking by 12.2% since March.
The New Zealand real estate market is one of the factors that indicate the country’s overall strong position. That’s because this market has defied all expectations and forecasts. Instead of shrinking, which is the expected thing in a recession, the market has gone into overdrive. Sales have actually increased compared to the autumn of last year. Prices don’t show any signs of falling as well. This means that buying a property in NZ remains a great idea for investors.
Buying Property in NZ Is Easier Now
Moreover, some of the changes happening now make it easier to buy housing in New Zealand today. A few of those changes are connected to the pandemic. The foremost among them is the reduction of interest rates that resulted from the recession. But there is also a matter of cheaper bank transfers to NZ. High transfer costs have long been an issue for foreign real estate investors and expats. Because of them, the cost of any deal could increase by up to 5-7%. However, today you can use much cheaper services to transfer money to NZ. This enables the buyer to save a hefty amount right away.
With both these factors combined, it has become more affordable to buy property in NZ right now. However, the demand for it hasn’t shrunk by a bit. The growth of the real estate market in New Zealand doesn’t seem surprising after considering these facts, recession notwithstanding.
Also, do not forget that pandemic or no, the demand for NZ housing remains high. It’s a side-effect of the limited availability. There simply isn’t enough room to start enough developmental projects to satisfy the demand. Therefore, as it always is with an asset in limited supply, property in NZ remains highly valuable all the time.
Investing in Property in NZ: Most Lucrative Places
In order to get the best deal when buying property in NZ you need to buy it in the right place. While all of the country is lucrative for real estate investment, its regions differ in returns.
If you are an investor focused on rentals, you’ll get the highest yields from Wellington and Auckland. Note that apartments, especially small ones, offer a higher yield. Also, Wellington has the highest level of housing demand in the country. But it also has some of the most expensive property in NZ.
Meanwhile, if you seek maximum capital gains instead of rent, you need to look at the more remote communities. As you can easily transfer money to NZ for cheap regardless of the exact location in the country, this shouldn’t be a factor for your choice. The best capital returns can come from places like Queenstown and Kawerau. The value of houses there has gone up by over 50% in the last few years. These areas would be best for expats and immigrants who want to make a solid investment in their future.
If your budget for buying property in NZ is limited, you’ll need to stick to those remote smaller cities as well. The south of the country, where the most popular beaches are, is more expensive. But it makes a good investment due to the high tourism demand. Unfortunately, properties in Wellington and Auckland usually cost over $1 million. Therefore, they aren’t really an option for budget buyers.
How to Transfer Money to NZ to Cut the Costs of Buying Real Estate
As mentioned before, it’s easy to transfer money to NZ without paying a small fortune in bank fees. All you need to do is to use money transfer companies instead. They are online-based and offer much lower fees. Leaders in this industry today are Moneycorp, OFX, and WorldFirst.
These companies make buying property in NZ cheaper because they allow you to make a transfer for less than 1% of the transfer volume. Compare this to 3-7% taken by banks, on average. As you can see, you immediately save a hefty sum of money.
Note that it’s expensive to transfer money to NZ through banks not only because of high fees. Many banks today set smaller set fees for international transfers. Therefore, the deal looks good on the surface.
However, banks always have a high foreign currency exchange (FX) rate markup. This means that you can overpay anything between 1 and 7% for currency exchange alone. Money transfer companies, on the other hand, have a low markup over the mid-market exchange rate. Therefore, the cost of transfers with them ranges between 0.5-3%, on average. The exact cost depends on the currencies involved.
How to Get New Zealand Citizenship & Why You Should Consider It
Without a doubt, New Zealand is a great country to live in. This is clear from the fact that it has a huge community of very happy expats and immigrants. It’s not surprising considering that the country is ranked among the top for having high quality of life. It also has excellent climate and breathtakingly beautiful nature.
Do not forget that New Zealand’s economy is growing fast and the majority of people here enjoy a rather high level of income. Moreover, the nation in its entirety seems to be very dedicated to children. You’ll find that every city, no matter how small, is perfectly fit for keeping children entertained and well-educated.
However, the one point that expats seem not very happy about is that the property in NZ is very expensive. But that’s why the opportunity presented by this economic crisis is not to be missed. Housing prices in the country aren’t going down. Therefore, you need to use the chance to get a lower interest rate on a mortgage.
Another advantage of New Zealand is that getting citizenship here is a rather straightforward process. You can get grant citizenship after living 5 years in the country under a legal permit. So, as long as you’ve lived in the country for a while and plan to continue, you can become a fully-fledged Kiwi rather easily.