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New Zealand – Buying Property

Legal Restrictions on Ownership/Sale of Property by Foreign Nationals

Foreign nationals are allowed to purchase and own property in New Zealand, but there are restrictions in place for some categories of people. The Overseas Investment Office (OIO) screens all foreign investment in significant business assets, including residential property over a certain value, to ensure that it meets the criteria of the Overseas Investment Act 2005.

Non-resident foreign nationals are only able to purchase residential property that is considered ‘sensitive’ if they have government approval. Sensitive land is defined as land that is over five hectares in size, or contains significant conservation or heritage values, or is coastal land over 1 hectare in size.

If a foreign national is looking to purchase sensitive land, they will need to make an application to the OIO for consent, providing information about their proposed purchase, their personal and business background, and the reasons why they believe their investment will benefit New Zealand.

Average Property Prices & Variation by Region

The average property price in New Zealand is around NZD$760,000 (as of February 2023). However, the property prices can vary significantly depending on the region. The regions with the highest average property prices are generally located in the North Island, including Auckland, Waikato, Bay of Plenty and Wellington.

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In contrast, regions located in the South Island, such as Southland, Tasman and West Coast tend to have lower average property prices. However, it’s worth noting that the cost of living in the South Island can be lower compared to the North Island.

Popular Locations for Buying Property

Auckland is the most popular location for foreign nationals to purchase property in New Zealand, due to its large population, growing economy and high demand for housing. Other popular locations include Tauranga, Hamilton, and Wellington.

Upcoming Attractive Areas for Buying Property

There are several new upcoming areas in New Zealand that are becoming attractive options for people considering buying property. These include Queenstown, Nelson, and Tauranga, which have seen a growing demand for housing and increased investment in the area.

New Trends in Property Market

The property market in New Zealand is currently experiencing a number of new trends. One of the most notable trends is the shift towards more sustainable and eco-friendly housing, with an increasing number of people looking to live in homes that are environmentally conscious and energy efficient. Additionally, there has been a growing demand for smaller, more compact homes, such as apartments and townhouses, as people look to downsize or seek more affordable housing options.

Is Buying Property a Good Investment?

Whether buying property is a good investment in New Zealand depends on a number of factors, including location, property type, and the current market conditions. Generally, investing in property in New Zealand can be a good long-term investment, especially if you purchase in a growing area with strong demand for housing.

Common Property Types in New Zealand

The most common property types in New Zealand include detached houses, townhouses and apartments. There are also a significant number of rural properties, including farmland and lifestyle blocks, which are popular with people looking for a more rural lifestyle. Additionally, there are many villas, both standalone and attached, which are popular with retirees and those looking for a low maintenance property. Land only is also a common property type, particularly for people looking to build their dream home.

Typical House Buying Procedure in New Zealand

  • Find a property: Browse online or through real estate agents to find a suitable property.
  • Inspection: A building inspection is recommended to assess the condition of the property.
  • Make an offer: Make an offer on the property, usually through the real estate agent.
  • Agreement in Principle (AIP): Obtain an Agreement in Principle, which is a pre-approval for a mortgage from a lender.
  • Legal representation: Hire a lawyer to review the sale and purchase agreement, title, and other legal documents.
  • Exchange contracts: Exchange contracts with the seller, usually through a lawyer.
  • Loan Approval: Obtain loan approval from a lender.
  • Settlement: Settle the sale and transfer ownership, usually through a lawyer.

Finding a Reputable Lawyer in New Zealand

  • Ask for referrals: Ask friends, family, or real estate agents for referrals to reputable lawyers.
  • Check qualifications: Ensure the lawyer is qualified and registered with the New Zealand Law Society.
  • Fees: Lawyers usually charge an hourly rate, which can range from $200 to $500.
  • Contact details: Visit the New Zealand Law Society website (www.lawsociety.org.nz) for a directory of registered lawyers.

Pitfalls and Problems

  • Limited knowledge of the local property market: Expats may be unfamiliar with the local property market, which can lead to making mistakes in the buying process.
  • Cultural differences: Expats may be unfamiliar with the local customs and legal procedures, which can lead to misunderstandings.
  • Hidden costs: Expats may be unaware of additional costs such as legal fees, building inspections, and loan costs.

Purchasing Property Through a Company in New Zealand

  • It is possible to purchase property through a company in New Zealand.
  • Advantages: Purchasing through a company can offer tax benefits, liability protection, and privacy.
  • Disadvantages: Setting up a company can be complex and expensive, and there may be restrictions on selling or transferring ownership.

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