Commercial

New Zealand Investment Property

New Zealand is a lovely place, it has a fresh green image, and despite it’s relatively remote location it still does very well on a global tourism market. However, what are the benefits of investing in New Zealand property, and if I am a foreigner, is it worth my time.

Positives

New Zealand does not have a capital gains tax, so when you sell your investment, you get to keep all of the profit.

New Zealand has a deprecation value of 4 percent per annum. This is a much higher rate when compared with Australia for example, which has a deprecation value of 2.5 percent. This means investors can claim a larger amount of a properties depreciation earlier on in the investment, which makes an investment more profitable earlier on.

Negatives

You will likely find it very hard to get finance from New Zealand banks as an international investor, so you will need to source money from else where.

As with any foreign investment property, you will need to hire a trustworthy property manager. If you can not be there to make decisions, you need someone there to manage the daily running of your property.

Repairs and Maintenance – New Zealand has a lot of older homes, when purchasing you need to consider any running repairs and maintenance that may be involved in the property.

Commercial v Residential

Statistics from 2007 show that rental office space in the 3 main CBD’s had grown an average of 6.4% in the 3 years proceeding with Wellington showing the highest rate of growth. This suggests that at least in a time of growth New Zealand commercial property investment is solid. Looking at residential property investment in New Zealand, the main cities are key areas of demand, as well as life style regions including Nelson, Gisborne, Coastal Northland, and areas around the lakes in the central Otago.

Research

As with any investment, and in particular in foreign investment you need to thoroughly research your purchase. This means getting your ear close to the ground in the New Zealand property market. The best sites to do this are realestate.co.nz, allrealestate.co.nz and trademe.co.nz. I think it goes without saying, but if you are considering buying a New Zealand investment property you need to seek professional advice.