Ever tried New Zealand?

Hi,

I've been asked to write an article for Australian Property Investor on Australians who have invested in New Zealand. So far I'm hearing that it's fully valued but I was wondering if there was anyone who had heard of places where there are still opportunities. Also, if anyone does have property over the ditch, how's it going.

Regards,

Sal.
 
Hi there Sal,

I've just bought a property in Christchurch which I'm really happy with. Great inner city location overlooking the Avon river , under $300k and returning $340 per week. Sure, I've sacrificed a little in capital growth compared to what I've been used to here in the west but as you can see, holding costs are much better. No problems finding tenants too.

Cheers Dean
 
Everything I am about to say in this post is a matter of fact and on the public record. Nevertheless, investors should always do their own research before making any investment decisions.


Sal

I'm an Australian who now lives in NZ and has invested in NZ real estate.

I don't know who told you that NZ property was "fully valued", but it is complete b/s (having said that, I can think of at least 2 high-profile adviser types who think NZ ends at South Auckland).

This is the Quotable Value NZ Property Value Map for January 2007.

PropertyValueMapNZ_1_.gif



You'll note that Invercargill ($172,337) has the lowest mean of any of the locations featured on that map and that the next lowest (Dunedin) is almost $90k more expensive ($263,111).

Invercargill is also only 2 hours away from Queenstown - the most expensive NZ market with a mean of over $550k.

Invervegas also did 12.9% from Jan 06 to Jan 07 (2nd only to Rotorua) - although the Dec - Dec figures had the positions reversed (Inv @ 14.7% / R @ 14.5%).

But enough about figures, here are some facts:

- Invercargill's population (after falling a decade ago) is rising again

- The Southern Institute of Technology - which pioneered zero-fees tertiary study in NZ - has confirmed zero-fees for 2007, 2008, and 2009.

- In NZ you can get zero deposit home loans up to $200k. $200k buys you a nice home in Invercargill - what does it buy you in Auckland?

- Invercargill has the Invercargill Licensing Trust (one of only a few LTs remaining in NZ). Each year the ILT re-invests about $8m back into the community.

- Southland also has the Community Trust of Southland - as a result of the sale to Westpac of the old (community owned) Trust Bank. CTOS has about $200m in funds under management and each year they re-invest about $5-7m back into the local community.

- The ILT and CTOS are putting about $10-15 million per year back into the local economy through grants, and capital projects such as Stadium Southland, the Civic Theatre (Opera standard), Splash Palace, and the recently completed indoor Velodrome (designed by the same designer as the Velodrome used in the Melbourne Commonwealth Games).

- For years there has been a push to secure direct flights to and from Australia. The airport has been upgraded to take jets, and it now has the 2nd longest runway in NZ. It is closer to Australia than any other airport, and is more reliable than both Queenstown and Dunedin airports. Qantas (for one) is reported to be close to commencing flights.

- And just off the coast there is the Great South Basin -

* * *
Bidding opens for oil and gas in Great South Basin
Monday, 31 July 2006, 2:12 pm
Press Release: New Zealand Government
Hon Harry Duynhoven
Associate Minister of Energy
1 August 2006 Media Statement

Opening of bidding round launches race for oil and gas in Great South Basin

Associate Energy Minister Harry Duynhoven today announced the much anticipated opening of bidding for new petroleum exploration permits in the Great South Basin off the south-eastern coast of Otago and Southland.

Mr Duynhoven confirmed that forty blocks are being offered for bidding, each approximately 9,000km2 in size. (That is 360,000 km2)

“This is perhaps the most exciting development in oil and gas exploration in New Zealand since the discovery of the Maui field almost 40 years ago. The Great South Basin has long been regarded as a region with enormous exploration potential
* * *​


- Both Shell and Exxonmobil have expressed an interest in the GSB.

* * *​
Power drilling: the search for our oil and gas

Although bidding for blocks in the Great South Basin opened more than six months ago, no oil major has yet put up its hand.

But that, said (Crown Minerals Manager) Feeley, was par for the course.

Just last week he was contacted again by an oil company which had sought information on the Great South Basin some months ago and was now wanting to return to talk about the bid process.

He is expecting the bids to arrive on his desk on the day bidding process closes on March 30.

Energy giants Exxonmobil and Shell have expressed interest. Chevron and BP are also understood to have visited New Zealand in the past six months to look at data​
* * *​


- The Southland region also has significant lignite (coal) reserves - "Venture Southland enterprise and strategic projects group manager Steve Canny said Southland was sitting on about 70 percent of New Zealand’s known lignite and fossil fuel reserves".

- There are gas reserves too - see Oil, Gas and Minerals in Southland

- The region is the gateway to the World Heritage Listed Fiordland National Park (Mitre Peak), not to mention NZ's 3rd island - Stewart Island

- And to cap it off - we have the lowest unemployment in NZ (2.8% / September Quarter 2006)




Yet despite all these things, Invercargill has the lowest median of any city in NZ.

When you think about what is happening in places like WA and Mackay where there are lots of minerals - does Invercargill sound like a city that is fully-valued to you, Sal?


M

Also Check out -

L and M Group (mining company) website - there are numerous references to Southland in the latest news and press releases sections.
 
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Hi Pitt St,

That is a terrific post on New Zealand and Invercargill in particular! I agree with everything you have stated and the facts are there for everyone to judge. Some of the major projects such as oil exploration in the Great Southern Basin and the Lignite plant are some years away I would think, but have huge potential for the area. I'm quite happy holding onto my Invercargill property for a little while longer :rolleyes:

Cheers,
Ozi
 
Invercagill still good?

I've been hearing a lot about Invercagill for the last 2 years being the choice of ge+ strategy. Don't know if it's peaked or has turned into a hype?
 
Can anyone confirm this?

No CGT or property tax in New Zealand... :eek:

I some how doubt this is true, I heard someone mention it once on the RK rich dad forums from a guys who lives in NZ, this could possibly be if it is you PPOR.

I have not done any research into this, is it a load of BS?
 
Can anyone confirm this?

No CGT or property tax in New Zealand... :eek:

I some how doubt this is true, I heard someone mention it once on the RK rich dad forums from a guys who lives in NZ, this could possibly be if it is you PPOR.

I have not done any research into this, is it a load of BS?

Not entirely true Dominik. There is CGT is NZ, currently set at $0 :D This applies to PPOR and IPs too. There is a catch though. This only applies to NZ residents. You get taxed on your world wide income, so if you are living in Australia, you are still liable for CGT if you sell in NZ. You pay the tax here though, not in NZ.

I know, it sucks doesn't it :mad:

On the positive side though there is no stamp duty payable in NZ and you also get 2.5% depreciation on the building, regardless of age :)

Regards,
Ozi
 
One way of possibly getting around the CGT issue is if you have a trust with a beneficiary also in NZ who you can distribute the capital gain to.

You would need to check the details, but I believe foreign-sourced income being distributed to non-resident beneficiaries is not taxed in Australia - except maybe for some withholding tax.

GP
 
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