- Buying Property in New Zealand
- Types of Real Estate Sales Processes
- Immigration, Residency and Investment in New Zealand
- Obtaining NZ Mortgage Finance for International Buyers
- Notes about New Zealand Houses
- Pre-Purchase Checklist
- Facts about New Zealand
- Working in New Zealand
- Education – Primary and Secondary Schooling
- Shipping your belongings
Buying Property in New Zealand
This part of our site provides you with a brief overview of the processes involved in buying a home in New Zealand. We have also given you some of the information you may need to consider when looking at making a permanent move to New Zealand, as well as many helpful links to make your research process easier.
The Process of Buying Real Estate in New Zealand
The process of purchasing a home in New Zealand is quite straightforward in comparison to many European countries.
When you have found a property you like, you then put in a written offer, usually through the agent who has shown you through the property.
In New Zealand, a verbal offer to purchase a property is not considered to be legally binding.
Your offer must be completed in writing using a Sales & Purchase Agreement, and is usually made conditional on factors such as mortgage finance, title searches and building reports – designed to ensure you are covered should anything go wrong with your purchase.
When all the terms of the sale (including the purchase price, settlement and possession dates and any other conditions you may require) have been agreed to by the buyer and the seller, a contract will be signed.
Once the Sales & Purchase Agreement is signed and dated, you will be required to pay a deposit (usually 10% of the agreed purchase price) which your solicitor will hold for you.
This contract is legally binding, and therefore neither party can pull out of the transaction once it has been signed, unless one or more of the conditions of the contract are not fulfilled.
For example, if your offer has been made conditional on you gaining mortgage finance, and you are unable to obtain that finance, you may choose to withdraw from the contract on that basis.
Once all the conditions of the contract have been met to the satisfaction of both parties, the sale is then considered to be unconditional and is fully binding.
At this point, your deposit is normally released to the owner and will not be refunded should you fail to settle for any reason. There is also usually a clause in the contract for interest to be paid on the remainder of the purchase price if you delay settlement for any reason.
See the Frequently Asked Questions section on our site for more information about the legalities of the buying and selling process in New Zealand.
Types of Real Estate Sales Processes
Sale by Private Treaty
Sale by Private Treaty is the name for the usual sales and purchase process described above.
There is no end date on the marketing campaign, offers can be made at any time and the normal Sale & Purchase Agreement documentation is used.
The Deadline Sale method is fundamentally the same as those of Auction and Tender except it allows maximum flexibility for you to accept what you like and when you like.
The property is offered for sale with no price with a deadline upon which offers need to be submitted (eg three to four weeks) on the basis that the vendors reserve the right to accept an offer at anytime before then.
This method will:
- Attract a high level of interest through the marketing programme.
- Create urgency as a result of a fixed time frame for offers to be made by.
- Provide the opportunity for a motivated buyer, prior to the deadline, to get in quickly and present you with a favourable offer prior to close of deadline.
- Invite interest on your terms without eliminating purchaser's variations.
- Ensure that interested parties will have little idea as to the level and extent of other interest.
- Not cap the price, therefore the risk of forfeiting a premium is averted.
- Allow you to be able to make decisions in your own time without pressure.
Buying property in an Auction situation – “under the hammer” means that you are an unconditional buyer immediately and will be immediately required to pay the agreed deposit (again, usually 10%).
Your contract will be the terms and conditions supplied in advance of the Auction itself and these are usually not negotiable.
Make sure you have viewed the property at an Open Home or by private viewing in advance of the auction itself. Have any property checks (including an independent valuation) done in advance if you are seriously interested in buying the property, as anything uncovered in a property inspection after the auction has ended is not grounds for breaking the contract.
Sometimes the agent marketing the property will have obtained some of the supporting information in advance for interested buyers, particularly the LIM report, which usually takes several weeks to obtain from the local council.
In New Zealand, Auction campaigns are most frequently used to market high-end or high value real estate, and should not be confused with Mortgagee Sale Auctions, where the holder of the mortgage on a property may require a quick sale and the buyers may be looking for a “bargain” purchase.
The sale by tender process is frequently used to sell commercial property, and for rural real estate including farms, but can also be used for residential property. The normal Tender process involves creating a set of Tender documents, which contain the terms and conditions of the sale (similar to an Auction).
The main difference between a Tender and an Auction is that the bidding process is private in a Tender.
Buyers put forward their best offer on the provided Tender documents, by the deadline required. The owner of the property (or their agent) may then negotiate with all buyers if the offers do not reach the level desired by the property owner. The owner has the right not to accept any offer, or to choose to accept an offer that may not necessarily be the highest.
If you are buying by Tender, you do have a chance to add some conditions of your own to the offer, which may help swing things in your favour if they are of sufficient value to the property owner.
Tender is perhaps best suited to property sellers and buyers who prefer details about the sale to remain confidential, but still wish to ensure they receive the best possible price in the market.
A Tender also gives all buyers the same opportunity to make an offer, at the same time, which is fair to all parties.
Immigration, Residency and Investment in New Zealand
If you have been granted permanent residency in New Zealand, there are very few restrictions on the type, or the amount, of property that you are allowed to buy here.
If you are coming in as an overseas investor and want to buy land or invest in property worth more than NZ$100 million, or buy “sensitive” land, then you must obtain consent from the Overseas Investment Office (OIO).
There are various ways you can migrate to New Zealand and obtain permanent residency, including the Skilled Migrant Categories (you need to be aged between 20 and 55 and eligibility is based on a points system), Family Categories (if you have family already settled in New Zealand), or Business and Investment Categories (including migrant investors, long term business visas, entrepreneurs).
For more information on all aspects of migrating to New Zealand, visit the New Zealand Immigration Department site www.immigration.govt.nz.
Obtaining NZ Mortgage Finance for International Buyers
If you need to borrow funds in New Zealand to purchase a property, you should be aware that different conditions will apply, depending on the status of your residency.
If you already have your New Zealand residency, then the only limits set by the banks will be based on your personal ability to service the loan, the security of the loan and the other usual criteria a bank may apply in offering mortgage finance.
If you are not currently a New Zealand resident, or an Australian resident, but are here on a Work Permit, mortgage lenders may require you to have a deposit of anywhere from 20% - 50% of the value of the property you wish to buy. If you are on a Work Permit, you may only buy up to 0.4 hectares (1 acre) of land without requiring OIO consent.
If you do not intend to become a New Zealand resident, but wish to buy a holiday home in New Zealand, banks will require at least the same level of deposit as above, and may even be a little stricter. As a non-resident, you can buy a property on up to 5 ha – 12.5 acres of land, as long as it is not waterfront or in a ‘sensitive’ area, in which case your purchase would require OIO approval.
Effectively, the less committed you are to living permanently in New Zealand, the less risk a mortgage lender will take with you.
Notes about New Zealand Houses
The majority of houses in New Zealand tend to be constructed on one level and are usually detached, low density housing. The “average” New Zealand home has three bedrooms, a separate kitchen and living areas, one bathroom, a garage (or off-street parking), and garden/lawn area around the house. The majority of New Zealand homes are less than 100 years old, and many were built after the 1950s.
Newer properties within established suburbs are frequently developed as “infill housing” and often
designed to fit two homes onto a section that may formerly have held one house.
These homes are referred to as “townhouses” and usually have two storeys (floors), are built of permanent materials and are designed in a modern style. They may be freestanding, or attached to the second townhouse on the property.
Local councils place limitations on the size of houses that can go on an area of land, known as the “footprint” which helps ensure there is still a certain amount of garden or lawn around a home. The required percentage of land around a townhouse is less than a normal home, which means there can be a smaller garden and lawn area.
“Ownership flats” are usually single level and attached to one or more other flats on the same property. Ownership flats were mostly built in the late 1960s – 1980s. More modern properties of similar attached design are normally referred to as units, and some may have been built as “over ‘60s housing” (which allows for higher density development).
Building materials range from timber (weatherboards) or brick cladding with timber framing, to plaster over concrete block or polystyrene block and concrete block homes.
Corrugated iron or Coloursteel (pre-coloured iron) is a practical and very commonly used roofing material, as is concrete tile.
Houses are generally heated with electric heat pumps, log burners, and nitestore heaters, while radiator style central heating is very, very rare. Reticulated gas for heating and cooking is not available in all cities. Water heating is often “wetback”, which means the open fire or log burner is plumbed in to the hot water cylinder, which can help save on winter electricity bills.
Be aware that many urban areas, including Christchurch, have smog reduction plans in place which affect homes that have open fireplaces and logburners that don’t comply with new low-emission standards. Newer technology log burners and wood pellet fires are among the options to replace existing fireplaces and old burners.
This website has more information on the Clean Heat project in Canterbury. There are government subsidies available to replace open fireplaces and old logburners, and to assist with insulation if necessary. Information on subsidies is available through the Energywise site.
Many houses built since the 1980s have electric underfloor heating which is fitted underneath the concrete flooring slab. This can usually be turned on or off for different areas of the house.
So you’ve found a property you love and you really want to own it – there are a few steps you should take before making an unconditional offer:
- Make sure you know your Christchurch suburbs, the relative property values in the different suburbs and the proximity to things that may be important to you – including schooling, recreational amenities, shopping, transport, cafes and restaurants etc.
- Find yourself a good solicitor who understands the Christchurch property market. If you don’t have a solicitor already, feel free to ask for our recommendations.
- Get an Independent valuation on the property. Every New Zealand property has what is known as a Government Valuation (GV) or Rating Valuation (RV), which is the value that annual rates (property taxes) is based on. This valuation is not based on a visit to the property, so frequently will not accurately reflect current market value, particularly if there have been significant renovations or extensions carried out. For this reason, we recommend you commission an independent valuation for the property, to accurately reflect the current market value. This valuation will include recent past sales of similar properties in the area, to provide a benchmark for the valuation, as well as other criteria including “replacement cost” to build a home of similar quality and other key factors. If you do not have a valuer you prefer to use, we are also happy to recommend some options for you.
- Carry out a Title Search. This job is normally done by your solicitor and ensures that the person you are purchasing from actually has the legal right to sell the property.
- Commission a Building Inspection. A building report is not always essential, but we highly recommend it to ensure you are confident of the quality of the property you are buying and that there are no major structural defects or maintenance issues to be addressed. These might cost you a lot of money to repair and therefore lead you to decide against proceeding with the purchase, or decide to negotiate a lower purchase price based on the likely cost of repairs.
Keep in mind that the property may have already been priced with this in mind, so there may not always be a lot of room to move. Building inspection companies can be found in the Yellow Pages, or we can make some recommendations.
- A LIM report (land information memorandum) obtained from the local government authority (council) gives a detailed information about the land and property. It will indicate geographic information like whether the property is in a flood plain, as well as details like building permits for any buildings constructed on the site, renovations and installation of logburners and swimming pools.
- Make sure you request a pre-purchase inspection (usually just before you settle and take possession of the property) to ensure there is no unexpected damage and all the chattels mentioned in the contract are still there and in good condition.
Facts about New Zealand
New Zealand (also known by its Maori name of Aotearoa), is an independent state located near Australia in the South Pacific Ocean. The country is made up of two main islands (creatively named North and South) and several smaller ones. New Zealand is approximately three hours flying time from the east coast of Australia.
Known for its rich and diverse cultural heritage and spectacular scenery, New Zealand is mostly populated by people of European descent, although Auckland (New Zealand’s largest city) is also the largest Polynesian city in the world.
New Zealand currently has a population of just over 4 million people. The indigenous Maori population currently makes up about 15%, 6.5% are from Pacific islands and nearly 9% of New Zealanders are of Asian descent.
Auckland is New Zealand’s largest city, set on the narrowest part of a peninsula between two harbours. It currently has a population of around 1.3 million and a diverse cultural mix of Pacific and Asian communities.
Wellington is the capital city, our seat of Government and is located at the bottom of the North Island, just above Cook Strait – the body of water between the North and South Islands.
Christchurch is the South Island’s largest city, and is referred to as the ‘Garden City’, because of its many public and private gardens. Christchurch is located halfway down the East Coast and has about 350,000 residents.
The second largest city in the South Island, Dunedin, is also on the East Coast and currently has a population of around 125,000. Dunedin is perhaps best known for fashion designers, alternative musicians and Otago University students.
Being a Pacific Island, New Zealand’s North Island boasts hot summers (with some humidity in Auckland and further north) and milder winters, while the South has fresh summer days and plenty of snow during the winter.
It rarely snows in urban areas of the South Island from Christchurch north, but there is usually plenty of snow for the ski fields. The majority of ski fields are in the South Island’s Southern Alps and the Queenstown area.
The warmest months are December, January and February, and the coldest June, July and August during these months temperature can range between 20-30ºC in the summer and between 15 to -5ºC during the winter.
For more about New Zealand weather and to get an idea of temperatures and forecasts, visit the New Zealand Met Service site.
If you intend on driving, all vehicles must be driven on the left-hand side of the road as they do in Britain, Australia, and Japan. Speed limits are in kilometres per hour (kph), not miles per hour (mph).
You can legally drive in New Zealand for up to 12 months if you have either a current driver's licence from your home country or an International Driving Permit (IDP). After 12 months you are required to convert to a New Zealand license. Note that the process of gaining a New Zealand driver’s license includes an eyesight test.
Be aware that when parking on the roadside, you must park facing the direction you are heading as opposed to just parking where you see a space (which is common in most European countries).
If you are using public transport, the most common service available is the public bus service, usually run by regional councils, which operates in all major centres.
Some cities also have an above ground light rail network, including Wellington (rail from the Hutt Valley into the CBD) and parts of Auckland. There are no subway systems in New Zealand.
Wellington also has a trolleybus system, which runs on electric wires around the city, and Christchurch has a tram in the central city which is only for tourists at present, but may at some point be expanded further.
New Zealand's unit of currency is the New Zealand dollar (NZ$). Coins have values of 10, 20 and 50 cents, $1 and $2; notes have values of $5, $10, $20, $50 and $100.
There is no restriction on the amount of foreign currency that can be taken in or out of New Zealand. However, every person who carries more than NZ$10,000 in cash in or out of New Zealand is required to complete a Border Cash Report.
Foreign currency can easily be exchanged at banks, some hotels and Bureau de Change kiosks, which are found at international airports and in most city centres.
All major credit cards can be used in New Zealand.
Internet Access and Mobile Networks
Broadband internet access is available in most parts of New Zealand, but speeds are lower than in many Western countries. In some cities (including Christchurch) fibre optic networks are being built to increase overall speeds, plus the Government has a high speed internet strategy in place to improve services to homes and businesses in urban areas.
Unlike many countries, New Zealand does not have a large range of telecommunications providers – the primary source of phone and internet is delivered by the Telecom network, which was previously government owned. Other companies resell Telecom’s services, but Telstra Clear also has its own network in Auckland, Wellington and Christchurch, offering cable internet, phone and television.
The main providers of mobile phone (cellular) services in New Zealand are Telecom, Vodafone and 2Degrees.
Working in New Zealand
If you have New Zealand residency, there are no barriers to you finding employment here. If you are applying for residency, then having particular work skills and qualifications will gain you more points on the immigration department scale than others, as the government tries to fill areas of specific skill shortages.
The lists of skill shortage sectors are updated regularly on the immigration department website www.immigration.govt.nz but to give you an idea, areas of skill shortage and absolute shortage may include roles in the IT and Medical (including GPs) sectors, Dental, Engineering (particularly electrical, chemical and electronic).
For the most recently updated list of skills shortages and the qualifications required, visit this part of the immigration department site.
Education – Primary and Secondary Schooling
In New Zealand, all children normally start school when they turn five years old (it is compulsory from age six) and usually finish High School at around 17 or 18 years old. The school year runs from late January to December and is divided into four terms with holidays in between each term, and the longest holiday over the summer period after Christmas.
Parents can choose between public (government run and funded), private (fees paid by parents) and integrated (partially government subsidised) schools. Cities usually have school zones, which mean they give priority to children who live within their zone enrolment area.
In Christchurch for example, school zones have a significant impact on real estate values, as many parents will choose to buy property within the zones of the most popular schools, to ensure their children will get a place, or to ensure an investment property is easy to rent.
You can find out more information about New Zealand’s education system here.
Shipping your belongings
Finding a good shipping company is the key to making a smooth transition into your new life in New Zealand.
It is important to note that New Zealand is an island nation with a unique ecosystem and a significant reliance on agriculture.
There are rigorously maintained agriculture regulations to consider when shipping your personal belongings.
All containers that land in New Zealand are checked by MAF (the Ministry of Agriculture and Fisheries) to ensure they don’t contain anything that may affect New Zealand’s flora and fauna, particularly pests and animal diseases (like mad cow disease) that don’t currently exist here.
This site has comprehensive information about what you should be aware of before shipping your household goods to New Zealand.