The real estate market in New Zealand is thriving due to a combination of factors. The country's stable government, growing population, and strong economy contribute to a robust housing market. Auckland, as the largest city and economic hub, plays a significant role in driving the overall market.
Population growth, fuelled by both natural increases and immigration, creates a high demand for housing. However, limited land availability and strict zoning regulations, particularly in Auckland, exacerbate the housing shortage.
New Zealand's strong economy, low unemployment rates, and favourable business conditions attract both local and international investors. The country's reputation as a safe and desirable destination, known for its natural beauty and vibrant cities, also contributes to its appeal.
Tourism is another driving force behind the property market, as it creates a demand for short-term accommodations and drives infrastructure development. Auckland, in particular, benefits from its status as an economic powerhouse and popular tourist destination.
With an average housing price of $1.35 million and accounting for 30% of the country's properties, Auckland offers a high standard of living. The city's diverse industries, picturesque harbours, beautiful beaches, and ample parks make it an attractive place to live or invest in real estate. In 2023, Auckland's median home prices have reached record levels, reflecting its desirability and strong market performance.
Many Singaporeans and foreigners residing in Singapore may be considering investing in overseas property markets to avoid the latest cooling measures by the government. These measures include higher taxes and stricter regulations, which could make buying property in Singapore more expensive. If you are looking outside Singapore for opportunities for rental income, holiday homes, and portfolio diversification, New Zealand might just have something suitable for you.
The New Zealand property market offers Singaporeans a range of advantages, from favorable investment conditions to strong capital growth and rental income. Some of these you might already know if you are a seasoned investor however, if this is your first foray into overseas property ownership, this might surprise you.
Both Australian and Singaporean citizens enjoy the opportunity to own a property in New Zealand under the same terms as New Zealand residents, making it attractive for Singaporean investors to take advantage in a market that has been growing steadily at an average of 5.8% annually.
For properties categorised as 'residential' or 'lifestyle,' Singaporeans do not require special consent to purchase land or houses.
Purchasing a property in New Zealand allows you to take a loan from a New Zealand bank or lender without affecting your borrowing capacity in Singapore.
Stamp duty is a significant upfront cost that can add on to your net cash investment. In Singapore, Additional Buyer's Stamp Duty (ABSD) of up to 30% applies for locals who are buying more than one property, and a hefty 60% for foreigners buying any residential property. New Zealand does not impose stamp duty on property transactions thus reducing the overall cost of purchasing a property and presents potential cost savings.
Under the bright-line test, New Zealand exempts most residential property sales from capital gains tax, unless the property was acquired with the intention of resale within five years for new-build homes.
Unlike countries such as the US, UK, and Japan, New Zealand does not impose inheritance tax on assets passed down to the next generation. This has been an attractive reason for long-term investors looking to preserve and pass on their wealth.
There are no restrictions on Singaporeans selling their residential property in New Zealand. Singaporeans can sell their New Zealand residential properties to any eligible buyer, including New Zealand citizens, permanent residents, and non-residents who meet the eligibility criteria set out by the New Zealand government. If the property has appreciated significantly in value since it was purchased, the seller may be subject to New Zealand's capital gains tax if the property is sold within 5 years or purchase.
There are risks associated with any investment. One should make informed decisions in order to navigate the process of buying a property in New Zealand successfully. Always remember to conduct thorough due diligence, work with trusted professionals, and stay up-to-date about the market. It is important to have a careful consideration of these factors and seek professional advice to help mitigate them.
Engage the services of a reputable lawyer who specialises in property transactions to help with the legal requirements such as conveyancing and advice on any legal issues or risks associated with the purchase. Conduct thorough due diligence, including obtaining a building inspection and conducting a title search, to ensure you are fully aware of the property's condition and any potential issues.
The typical deposit amount required for a property purchase in New Zealand is 20% of the purchase price. This deposit should be securely held in a lawyer's trust account until the settlement. The maximum loan amount is usually 70% of the purchase price and is subject to your financial situation and credit criteria. The balance of the purchase price is paid when the property is complete and ready for handover with titles and consents.
Singaporeans buying a residential property in New Zealand are subject to the same taxes and fees as New Zealand citizens and residents. This includes Goods and Services Tax (GST) at 15%, property tax (known as Rates in New Zealand) and potential income tax on rental income. However, there may be exemptions and concessions available depending on the property type and individual circumstances.
Beyond the purchase price, consider additional ongoing costs especially if you are buying for investment. These expenses should be factored into your budget and financial planning:
Research the local property market to understand trends, prices, and demand. The New Zealand property market can be subject to fluctuations and volatility. Stay informed about market conditions to make informed decisions and assess the potential risks and opportunities.
While New Zealand has had past issues with building quality, reputable developers like Nest or Invest prioritises the quality of its properties. Each development undergoes rigorous inspection processes by the Auckland Council to meet building quality requirements. Look for properties that have passed inspection and received a Code of Compliance, certifying their compliance with building standards.
Consider the location of the property carefully. Research the area for factors like natural disaster risks, crime rates, and infrastructure quality. Take into account your preferences and lifestyle needs, such as proximity to amenities, schools, parks, or outdoor recreational areas.
Familiarise yourself with New Zealand's tenancy laws if you plan to rent out the property. These laws heavily favour tenants and may impact eviction processes or rental agreements. Understanding the legal obligations and rights of both landlords and tenants is crucial for a smooth rental experience.
New Zealand has a unique culture and way of life. Research the local customs, social norms, and lifestyle preferences in the area where you are considering buying a property. Consider properties that align with New Zealanders' emphasis on outdoor activities, relaxed living, and proximity to natural amenities like parks, beaches, or hiking trails.
