Your Home Away from Home: The Definitive Guide for Buying Property in New Zealand

New Zealand is thought by many to be a fairy tale come true. The beauty of nature melds with a rich Maori culture in an environment that is both humble and welcoming. The country’s Covid-19 response has been strong, and has resulted in a booming domestic travel market. This makes New Zealand an attractive destination for a property investor.

If you are a foreigner reading this, you may not be able to visit currently but you may be able to purchase an investment holiday home in New Zealand. It will enable you to have a place of your own when you do eventually visit, but also an additional stream of income when you rent the home out to visitors throughout the year.

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How to Find Property in New Zealand

Like most places, the majority of property purchases are done through realtors. Property agents are licensed and skilled at negotiating prices for the buyer and the seller. There are those who specialise in facilitating purchases for non-natives, but most agents should have full knowledge of the rules and regulations that concern buying homes from abroad.

Many buyers search online databases to find the New Zealand property of their dreams. This is an excellent place to start, but it is wise to, if possible, view the property in person. Since travel is restricted to New Zealand residents, investors may ask a realtor to provide further photographs or videos of the home. It is common for a New Zealand property to have had an inspection before it is listed, which should detail the condition of the home. However, a good investor should commission their own inspection to ensure nothing has been overlooked.

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The Cost of New Zealand Properties

To fully understand the cost of holiday homes in New Zealand, an investor should first consider location. Consider the holiday hotspots of New Zealand, according to Bachcare data (LINK TO PDF) the most popular destinations for kiwis to rent a holiday home are: The Coromandel, Queenstown-Wanaka, Lake Taupo, Canterbury, Mount Ruapehu.

Some buyers prefer South Island due to the unique natural beauty. Christchurch is an excellent choice for foreign homeowners who wish to rent their new homes to travelers.

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How to Buy Property in New Zealand as a Foreigner

The cost of property in New Zealand has risen sharply in recent years and continues to do so. Timing your investment with the New Zealand property markets rises and falls is crucial to getting a good deal. However, foreign buyers may find it somewhat difficult to make the purchase without proper planning.

In order to keep prices from even steeper climbs, the New Zealand government has enacted some restrictions on foreign owners. This is particularly true of those who plan to purchase second homes to use as income or holiday property rather than those who plan to permanently relocate to the country.

Those wishing to purchase property in New Zealand will need to understand the regulations as they pertain to the buyer's country of origin and the type of property being purchased. There are some situations in which government approvals are required before the purchase is allowed.

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Eligibility for Buying Property in New Zealand

There are legal requirements to buying land in New Zealand. Investors should consult a conveyancer or lawyer to help with the many requirements and paperwork. A lawyer can help a foreigner to understand what properties they may buy, and then navigate all of the legal issues.

For example, an Australian citizen can buy a holiday home in New Zealand, but a United States citizen may only be eligible to purchase an apartment. A Singaporean national can buy a residential property of virtually any type in New Zealand, but a Canadian citizen must obtain a visa first. For more information, please use the New Zealand government’s tool located here: https://www.newzealandnow.govt.nz/living-in-nz/housing/buying-building

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Securing Funds for New Zealand Property

Once an investor has established they are eligible to buy property, they will probably need a bank loan. Regional and national banks alike offer bank loans or mortgages. However, not all offer them to foreign buyers. A mortgage broker is generally the right choice for finding the appropriate bank. An attorney or real estate agent can point an investor in the direction of a mortgage broker who can help.

An issue that is sometimes encountered by foreign holiday home owners is that of qualifying for a loan. New Zealand banks generally require locally established credit for issuing mortgages. Unless the investor has taken out a New Zealand-based line of credit, they may not have a local credit history. This can create problems being approved for a bank loan. In this instance, a good option for an investor is to talk with banks in their home country. It may be possible to more easily secure a loan at home for use overseas.

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Property Purchase Fees

A deposit payment on the home is required immediately after purchase. The amount of the deposit varies depending on the price of the home and the type of loan that was secured. Along with this down payment and the monthly installment, investors will have other taxes and fees.

Lawyer Fees: The cost varies, but it is typically about $1,500 NZD.

Public Registration Fees: This fee is a flat $80 NZD.

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How to Make the Most Out of a New Zealand Property Investment

A holiday home ensures a comfortable, friendly place to stay while traveling to New Zealand. However, there is no reason for the home to sit empty when the owner is out of the country. Bachcare allows owners to list their homes as rentals for others who are travelling around New Zealand for business or pleasure. Homeowners can earn additional income by listing their second home  on Bachcare, and it also means the home is automatically listed on Booking.com, Airbnb and Bookabach at no extra cost. The Bachcare team takes care of all of this for you: from creating your listing, to marketing, pricing, and even cleaning your property.

Listing a home as a short-term rental is an excellent way to cover the cost of your overseas investment. Owners can block out the days that they wish to use the property themselves and list the rest. It may require hiring a property manager and cleaning  services, but that means you can have peace of mind wherever you are around the world, that your rental is taken care of.

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