Expat Guide To Buying A Home In New Zealand

New Zealand scape

Estimated reading time: 7 minutes

If you are leaving Britain and want to move somewhere with more bang for your property buck, then New Zealand should be near the top of your wish list.

New Zealand is around the same size as the UK – the two islands cover 268,000 kilometres with a population of just 5 million compared to Britain’s 66 million.

Property prices average £295,000 compared with £240,000 in Britain, but the comparison ends there.

For that money, expats can buy a home that measures three times the size of a property back home.

No wonder New Zealand is so popular with want-away Brits looking to start a new life. The country is the world’s sixth favourite getaway for British expats, with 215,000 settling there.

But only residents can buy homes in New Zealand, although some special deals are offered to wealthy investors.

Where expats live in New Zealand

It’s fair to say you will find a smattering of British expats wherever you go in New Zealand.

The most popular places are the big cities. A third of the population live in the largest city – Auckland.  Other expat magnets are the capital, Wellington and Christchurch.

New Zealand house prices

Auckland is by far the most expensive place to buy a home. Property prices are roughly double those you will find anywhere else.

However, the property market is booming across the country, with prices rising an average 19.8% year-on-year to October 2020.

The Real Estate Institute of New Zealand (REINZ) monitors the housing market and publishes a regular report of how the market’s moving.

The latest data shows:

Average year-on-year house prices for October 2020:

 Average price 10/20Average price 10/19Change
New Zealand excluding Auckland£312,628£270,945+15.4%
Source: REINZ

Besides Auckland, 10 regions saw record house price rises in the year, with four posting increases of more than 20% – Gisborne (34.1%), Marlborough (26.8%), Otago (22.7%) and Wellington (20.8%).

Some tips to bear in mind are buy quickly if you like the look of a home and check out property auctions.

According to REINZ, one in four homes go under the hammer, while sellers receive an offer in an average 29 days.

Can Expats Buy Homes In New Zealand?

Buying a home in New Zealand is not about residence status but rather than nationality.

Because the housing market is so buoyant, the government took steps to stop foreign speculators from buying as an investment and selling at a profit. The view was this stoked house prices and made them unaffordable for New Zealanders.

Foreigners can still buy property in New Zealand provided they follow the rules.

You should talk to the New Zealand immigration authority about your residence status and visa options as an expat.

For some pointers about your residence status, try the official government web site New Zealand Now

The good news is you can buy residential land or property if:

  • You have New Zealand citizenship
  • Have a permanent residence in the country for at least 12 months, are tax resident and have spent at least 183 days of the past year there

If you have a residence visa but do not automatically qualify to buy a home, you can apply to the Overseas Investment Office for permission to purchase.

Other options include investing in a new business in New Zealand.

The rules are more complicated if you are buying an apartment as a foreigner. As these were favoured purchases for speculators, developers have quotas restricting the number of homes they can sell to foreigners.

Travellers on visitor, study or working visas are unlikely to gain permission to buy a home.

Finding A Property In New Zealand

Choosing where to live and completing the purchase is stressful in every country – but a little easier in New Zealand where you can zip through the process in as little as three or four weeks.

It’s sensible to follow some simple steps in the right order to become the proud owner of a home in New Zealand.

Sort out your finances

You can’t tie down what you can afford to buy until you know how much a mortgage lender will offer you unless you are lucky enough to be a cash buyer.

Lenders will pre-approve your mortgage application and most estate agents and developers will want to know you have this important paperwork sorted before accepting an offer.

Your budget shouldn’t only cover the cost of a home but all the associated fees, like legal costs, which come to around £1,000.

Check out the market

Although the stats talk about average prices, the cost of homes in every neighbourhood will vary widely depending on factors like public transport, size of property, schools and amenities, distance from city centres and the like.

Research your chosen neighbourhood. You may find by looking a couple of streets away, you still have all the benefits of a more expensive area but pay less for your home.

New Zealand has a thriving online property marketplace led by Rightmove, Real Estate New Zealand and Zoopla. You can also try Harcourts or Century 21.

If you are already in New Zealand, go to a few open house days to get an idea of what you can get for your money.

Property types

Property jargon is different in New Zealand – so here are some terms you need to know when house hunting:

  • Standalone – Detached houses in their own grounds
  • Attached – Can include semi-detached, terraced or townhouses and even apartments
  • Section – Land allocated for building homes
  • Zoning – Planning permission

Making an offer

Making an offer can be complicated in New Zealand as there are several ways to secure the best price.

Most house sales and offers are through an estate agent.

Buyers can rest assured that if their offer is accepted, they can’t be gazumped as the tactic is outlawed in New Zealand.

These are the methods of sale:

  • Advertised price – Like the UK, the seller sets an asking price which is negotiable with no deadline
  • Deadline sale – This is similar to the advertised price, but the seller puts a deadline on when buyers can make an offer
  • Negotiation – This is often a sale ‘offers in the region of’ or a property that is difficult to price and subject to doing a deal with the seller without any deadline on talks
  • Tender – The seller takes sealed offers with a deadline
  • Auction – The winning bidder pays a deposit on auction day
  • Multi-offer – This is often a bidding war between two or more buyers

The Legals

Once an offer is accepted, the buyer’s job is mostly done – it’s up to the seller to register the title and the conveyancer to complete the legal work.

Once the documents are completed and signed, the buyer hands over the remaining balance of the purchase price and picks up the keys.

Buying A Home In New Zealand FAQ

Buying a home in New Zealand is quick and easy compared to many countries.

Expats may find some of the hoops they must jump through bewildering, but if they have the right team of professionals to help, everything should flow smoothly.

Here are the answers to some of the most asked questions about buying a home in New Zealand.

I have a residence visa but my partner doesn’t – can we still buy a home?

You can go ahead with the purchase if one of you qualifies as a permanent resident but check with your lawyer or the authorities before committing to making an offer.

What do RV, GV and CV stand for on property brochures?

RV is rateable value, GV is government valuation and CV is council valuation. These figures are not the market value but form the basis for the rates/council tax the owner pays.

Should I ensure my home against earthquake damage?

If you have private home or contents insurance, earthquake cover is automatically added to your premium by the insurer.

What do the LVR rules cover?

LVR stands for loan-to-value ratio and is the amount a buyer must pay as a deposit on their home when borrowing for a mortgage.

The New Zealand Reserve Bank limits the maximum loan to 80% of the buying price, so the buyer must pay the rest.

What is the settlement day?

Settlement Day is the day the purchase completes, and the keys are handed to the buyer – in the UK it’s called ‘completion’

Below is a list of some related articles, guides and insights you may find interesting.

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