New Zealand Property Buying Process

House price inflation in New Zealand is accelerating according to the latest Quotable Value figures released in April. The figures show that the annual gains to April 2005 were 12.5%, up from 12.1% the previous month.

House price inflation in New Zealand is accelerating according to the latest Quotable Value figures released in April.  The figures show that the annual gains to April 2005 were 12.5%, up from 12.1% the previous month.

These figures have resulted in an increase in confidence among home owners that 2005 will be another year for strong property price gains.

And it’s not just the general public that have a positive attitude towards the property market in New Zealand; a survey conducted in February by the New Zealand Property Investors’ Federation found that 68% of those property investors surveyed intend to continue making investments in New Zealand real estate throughout 2005.  The majority of the investments will be made in residential property for long term rental returns.

These facts and figures point to the fact that the property market in New Zealand is strong and buoyant, and if you would like to make your own inroads into the market here’s a guide to the New Zealand property buying process.

The first point to note is that there are no dirty tricks associated with buying property, so don’t worry about being gazumped!  In fact, the whole process is considered so safe and straightforward that it is not a requirement to employ the services of a lawyer. 

However, when undertaking a transaction the size and magnitude of buying property it is wise to employ an independent legal adviser to ensure your best interests are protected.

Furthermore, it can actually work out cheaper to have your lawyer look after all the searches and contractual issues rather than having the estate agent do it, which is the other alternative available to you.  This is because lawyers will charge a fixed fee in the region of NZD600 whereas the estate agent will charge a percentage of the purchase price.

So, first things first you have to locate the property that best meets your requirements and specifications.  There are many estate agencies in New Zealand and many of them have internet sites offering detailed listings of their properties which will allow you to compare like for like across regions and towns to get an idea of how far your budget will stretch.

Many local and national newspapers have property listings particularly on a Wednesday and Saturday.  The Real Estate Institute of New Zealand also have a property directory site with news, stats, mortgage calculators and of course properties by region.  The site is: - http://www.realenz.co.nz/

When you locate a property you like you have to make a formal offer to purchase in writing.  This offer should include any sums you’d pay for fixtures, fittings etc., and will be conditional to a mortgage offer, surveys and searches.

If your offer is accepted then a 10% holding deposit will be paid either to the solicitor of the estate agent who is handling the terms of the sale.  This deposit will be held for a fixed period of around 10 days or until such time that all conditions for the sale have been met.

A contract is then signed that includes all the conditions of the sale, the completion date etc., and it usually takes around 3 weeks from signing the contract to taking possession of the property - though this figure is a rough indicator and as many factors can vary, so can the period to completion!

Once the purchaser and vendor have signed the contract it is legally binding and if one party then backs out of the sale there will be financial penalties levied against that party.

And the final positive point about buying property in New Zealand is that there is no such thing as stamp duty!  The total cost of the whole process including legal fees, getting utilities connected and even arranging a mortgage should be in the region of just 5% of the purchase price.