Property in New Zealand Buyer's Guides

The buy-to-let offerings in New Zealand can seem pretty attractive: when you factor in relatively strong demand in most urban areas, healthy rental yields and plenty of tax perks you can get upwards of a consistent 8% on your investment at the moment.  Which, when your savings account is probably only offering you 1% at best at the moment, can seem highly attractive.

However, the Finance Minister has been talking tough about those who’re getting rich off the back of buy-to-lets in New Zealand and threatening tax reforms, which may make it less attractive to be a property investor in New Zealand going forward.

You can then add to that the fact that apparently 44,000 homes newly constructed over the past 10 years all leak because of poor building standards and the incorrect use of what are unsuitable materials in New Zealand, and you have at least 44,000 reasons not to buy any property in haste in New Zealand at the moment.

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According to the Westpac Bank, prices for property in New Zealand have now fallen to a fair value, based on rents, interest rates and other costs.  This is the first time that real estate in New Zealand has been below a reasonable price that investors should pay since 2006.

Westpac Bank economists are predicting a 5% drop in New Zealand real estate values for 2009 too, and flat line movement for the market in 2010. 

The Reserve Bank forecast however is a little gloomier, with predictions of a 20% drop in New Zealand house prices from their peak in late 2007, to a bottom sometime at the end of 2010.  But with prices having fallen nationally around 8% since the peak, they have almost lost half of their predicted depreciation already.

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Even in spite of the global financial turmoil that’s affecting property markets everywhere, every property market also faces a further slowdown during the winter months - and the market in New Zealand is no exception.

The only difference is that, as we in the Northern Hemisphere head towards spring and summer, usually times of increasing interest in the real estate sector, Kiwis are getting ready for their winter, and the end of daylight saving time in April usually heralds the end of the New Zealand real estate buying season. 

As with most property markets in the world, sales are more sluggish during winter - and lending restrictions and rising unemployment due to the credit crisis are also expected to have an effect this winter too.  In this article we look at how to sell a property in New Zealand if you want to get out of the market, and we look at ways that expat buyers can get on to the property ladder in New Zealand too.

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