I have seen some promising deals in parts of NZ
What areas would others look at?
What issues need to be thought trough when investing in NZ or any other western democracy for that matter?
Hi Shawn,
many things need to be considered.
“first look at your own backyard before you look at your neighbours” – I mean – understand investing well here, then look elsewhere
personally, I like the South of NZ
Kind Regards,
George.“If You never never ask, you’ll never never know”
Hi Shaun
Welcome to the forum.
I would do your due dilgence on areas you would like to invest in.
Once you have done your due diligence on areas and I mean talk to property managers in areas you would like to invest in then set your goals as to what sort of property you would like to purchase.
May be talk to some of the bird spotters that are sourcing property to further your due dilgence.
Yields form 10% to as high as 20% are being made throughout the country but mainly in the small towns.
Regards
As you may know, New Zealand real estate prices have appreciated across the board in the past couple of years.
The best location depends on your entry point – as in how much capital you want to invest.
If you are seeking to buy a low to moderate cost SFH [single family home] – positive or negative geared, Dunedin in the South Island is a solid location with a lot of potential moving forward.
If your entry point [capital/risk] is higher, I would recommend the Central Otago region – specifically Queenstown, Arrowtown, Wanaka, or Glenorchy which is significantly undervalued.
These are the hottest markets in New Zealand – internationally at this time from our perspective. Although at the higher end of the price scale for New Zealand, we estimate this region is ~50% of where it should be in terms of short to medium term valuation.
Personally, I would avoid most – if not all, of the North Island including Auckland.
As for first steps, locate a property you feel is appropriate and within your price range – at the same time find a qualified advisor/broker to assist you with the technicalities.
— Michael
Thanks Michael
I found your reply interesting. I am looking to buy two, low to moderate cost, positivly geared propertys in the Hamilton area of the north Island.
I am married to a New Zealander and we are in and out of hamilton airport on family business about three or four times a year anyway.Everywere I go I see opportunities.I would be interested to know how you have been able to do your research and information gathering and what reasons you have for those south island destinations.
I was in Palmerston North about two weeks ago for a wedding and saw several properties that meet Steves 11 second test.
How would you approach financing a purchase over there? I was thinking of using equity and cash here in AU$ to complete my purchase avoiding any cross securitisation. Allowing a way foreward for further aquisitions.
I plan to travel there on the 15th next month and do some serious looking. I believe there are far better opportunities there at present than anyware here in Victoria that I know about
Thankyou in advance
ShawnThe markets I have highlighted offer a lot of potential in terms of capital gains. But in saying this, you may have found comparable [or better] opportunities in Hamilton.
The New Zealand market is in an interesting cycle due predominantly to foreign interest and investment – and it is considered a safe haven. The market will plateau for a short period, but it is undervalued in most regions and not expected to endure a typical downward adjustment.
I would recommend using cash reserves/equity in Australia to finance any shortfall – difference between cost of purchase and bank loan. Then finance the properties via a New Zealand bank, or other lender if a more competitive rate is negotiated.
Interest rate adjustments, currency exchange and so forth will then not adversely effect the transaction over time. If the interest rate/economy in New Zealand gets to a point where you can save money refinancing the deal from Australia, then look at originating the loan in Australia.
Either way, use equity from the properties – combined with a New Zealand-based loan, to finance ongoing investments in New Zealand.
I am based in the United States and my company has closely monitored the New Zealand and Australian markets over the past couple of years – hence my reference to research.
Although we are involved in real estate investment/development, we do not participate in SFH’s – but do still monitor this segment due to the impact it has across the board.
Best of luck.
— Michael
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