Investing in New Zealand

[Robbiep]

Hi All,

I was wondering if there are any investors here, based in Australia, who are actively investing in New Zealand?

It only came to my attention that there is no stamp duty and capital gains tax in New Zealand.. what a plesure! lol.

I'm also sure property prices are alot 'grounded' over there.

Would be interested in hering from investorw who are active in New Zealand.

Out of interest, would an Australian bank finance a property purchase in NZ?

Regards,
Robbie

 

[geoffw]

There have been discussions her in the past but perhaps not for a while. One might think that New Zealand property is on shaky ground ;-)

Propertytalk.com is a New Zealand based property forum and should be able to give some help.

 

[Robbiep]

LOL Shaky ground!

 

[singingtheblues]

NZ shot up in the early 2000s but has been pretty stagnant since - they have had a long hard recession - you need to look carefully at what's going on with demographics - a lot of people are still leaving to come to australia & there is a lot of inward migration from asia - plus people are moving away from christchurch to the other cities - it's a small population so small changes can have a big impact - i'd look at dunedin which may benefit from the movement of people away from christchurch & is a big university town - wellington which is quite trendy & cosmopolitan these days & auckland which has a critical mass of people -

you also need to remember that just because they dont have capital gains doesn't mean that australia doesn't - you'll still have to pay here on the gain - but no stamp duty is a bonus & the exchange rate is good - however i'm not sure that you'd ever be able to take advantage of big movements on the exchange rate in bringing the money back

 

[akiwinut]

I've got a place you can buy!

 

[Andrew_A]

Hi All,

I was wondering if there are any investors here, based in Australia, who are actively investing in New Zealand?

It only came to my attention that there is no stamp duty and capital gains tax in New Zealand.. what a plesure! lol.

I'm also sure property prices are alot 'grounded' over there.

Would be interested in hering from investorw who are active in New Zealand.

Out of interest, would an Australian bank finance a property purchase in NZ?

Regards,
Robbie

Could be worthwhile digging around the archives, some excellent discussion here as there was quite a bit of interest in NZ some years ago on the forums, also plenty of forum people who own property there to make contact with.

 

[Rolf Latham]

Judging by the NZ population whe where I live Id say, last one to leave NZ please turn out the lights

ta
rolf

 

[pennyk]

I remember when I first came on the forum, there were lots of people investing in NZ, because of cashflow, combined with capital growth.
It seemed quite a lot of people got burned.... because of population/economic issues, also not understanding rules for developments/ subdivisions and just expecting a better result than what happened.
I suspect in 4 or 5 years time, we'll see a similar outcome for many people investing in the US now. Its tempting to chase quick/ exciting returns, and not consider that high returns are usually the result of higher risk.

 

[Robbiep]

Hi Penny,

I think for some it might be about chasing quick, exciting returns, but for others is might be a matter of diversification.

Regards,
Robbie

 

[mattnz]

Also be aware they recently changed the rules in NZ and you can't claim depreciation.

I have to say that coming to Australia, it was hard to comprehend these crazy new concepts of:
a) AUD $1 million to buy an average house in an average suburb in Sydney, or AUD $600k for an average 2 bed unit seemed insane
b) stamp duty is a government rort
c) why pay capital gains on your investment?
d) why pay lmi when using a standard 10% deposit?

There are many advantages to investing in NZ

Steve McKnight tells of literally buying up every house on the market in Tokoroa and selling a short time later (less than a year) for twice what he paid for them.

The NZ banks (all owned by the big 4 Australian banks except for Kiwibank) will lend you money as an Australian citizen, "no worries bro"

Interest rates in NZ being lower than in Australia is a new phenomon, which hasn't occurred in my living memory before now.

AUD/NZD exchange rate is currently great for investing over there.

Hope this info helps.

 

[Robbiep]

Thanks Mattnz,

Do you currently own property in NZ and Aus?

 

[mattnz]

I sold in NZ in 2005, just sold in Melbourne this month and have 2 development sites in Gladstone.

 

[Thesnowyforest]

why would u buy in a place that has negative population growth.

 

[mattnz]

nz is more than just "1 place" with many cities and markets.

Opportunities to do strategies like renovations can be much more profitable, without losing around 5% of the purchase price to the government before you even start as would happen in Australia.

 

[Think smart]

Investing in Auckland

Apartments in central Auckland are showing a net return of 8 to 10%.Ocupancy at around 97%.Buying at $4000 per m2 is achieveable ,replacement cost is around $7000. Hence no new stock will come on line until current prices increase,this is putting pressure on rental supply.Personally leasehold property should be avoided ground rent is dead money. A few years ago NZ went through a phase of sub standard building leaving buildings with water penetration issues, avoid these buildings.
The past 6 months has seen capital growth of over 6% in central Auckland,some say why invest in a country with negative growth,sure this may be true for regional areas but Auckland is showing the opposite trend.The world population now increases at over 9000 people per hour nearly 80 million a year.Any country with high rainfall good soils, and food production systems in place are set to win.
To summarize NZ intrest rates at 5.74% exchange rate of around $1.30 to aus dollar snap them up boys.The best exchange rates are found through foreign exchange companies nots banks.

Good Luck.

 

[ermat]

Hi Thinksmart.
Do you have any advise regards how how an ausi should structure an Auckland property investment?
In particular from an ausi tax perspective.

 

[Lissica]

why would u buy in a place that has negative population growth.

There's net migration to Australia, but that doesn't equate to negative population growth.

Agree with all of what Mattnz has to say.

I'm amazed at Sydney prices compared to NZ, but then NZ seems cheap when you are earning AUD$.

Only thing I have to add is beware of exchange rate risks. The AUD is at multi year highs against the NZD. Doesn't mean it won't gain further, or head the other way. I'm in the process of transferring AUD back to NZD as I'm going back there to live long term. In the 5yrs I've been in Australia, it's varied from 95c AUD to 72c AUD.

I have a property in Wellington, NZ (since 2003). It went up in value, but then has been fairly flat since 2007. Just settled on a property in Perth, and I work in NSW >.<

 

[Lissica]

Hi Thinksmart.
Do you have any advise regards how how an ausi should structure an Auckland property investment?
In particular from an ausi tax perspective.

I'm an Australian tax resident, but have mine in an investment company. If you're intending on being positively geared, then the NZ company tax rate is only 28c. You can set up a NZ company online for less than a $100 from memory, and after that you only need to update details online every year to keep it incorporated.

There is a double tax agreement between NZ and Australia, but I don't think it applies to imputation (or franking) credits, so if you have it in a company structure, you need to take that into consideration.