Hi all,
As you may or may not know, I just got back from NZ the other day. I’m a first time investor and spent the past 2 weeks traveling both the North and South islands in a bid to purchase some investment properties. Although I only managed to buy one property, the experience gained from the trip was invaluable. I just thought I’d give you a quick run down on how I see the market over there, for anyone interested, including any newbies looking to invest in NZ.
The towns/cities I spent time in were:
– Dunedin
– Invercargill
– Balclutha
– Gore
– Wanganui
– Marton
– Taihape
– Hawera
– Taumaranui
– Taupo (this was just a stop over)
– Wairoa
– Rotorua
– Tokoroa
– HamiltonAs you all know, most of NZ has experienced some phenomenal capital growth the past couple of years, but from what I could see, there were no signs of the market slowing down any time soon. Sure, sooner or later things will start slowing down, but the market in it’s current state is very hot! It’s getting harder and harder to find good deals. Finding positive cashflow deals isn’t all that hard if you look, but finding a good quality property which has the returns is getting harder and harder. In many instances, I couldn’t believe how quickly deals were getting snapped up! It was unbelievable. Most of the good deals get snapped but before they even hit the market, or not long after, so acting quick is essential. I also think that in today’s market, it’s the people you know that will get you the good deals.
Just as an example, one of the agents I was with wanted to show me a high yielding property which had just come on the market (hadn’t been listed yet). I was at her office at 10am, we arranged to go view the property at 12pm. When I got back 2 hours later, she informed me that there were already 2 cash offers put on the property, sight unseen (above asking price) since I last saw her.
For those of you who only rely on the internet to source properties, i.e. via realenz.co.nz etc… you are missing out big time! Most deals don’t even reach the internet, and it’s often the left overs that can’t be sold that are listed online.
For those of you who haven’t been to NZ and are buying sight unseen, unless you have great contacts on the ground there who know the good/bad areas, I’d highly recommend going over there and seeing the towns in person. There are some really rough areas in certain towns, so unless you know where you are buying, be warned. It’s amazing how much information you can get out of the local property managers if you ask for it! One local property manager in Wairoa took me for a drive around town. When I asked him where the “bad” areas are in town, he took me there… to no surprise there was a police car as we approached the street, it appeared that one of the houses had been fire bombed or something.
Anyway, enough babbling from me. NZ is a beautiful country and I’m glad I took the plunge. If you haven’t been, I’d highly recommend it!!
Regards,
OziHi Ozi,
Well said !!!!
Sounds like the costs involved in going, were well worth it for you. I definitely agree that if you are considering investing in NZ, that it is worth going and seeing things “warts and all” in person. Photos can be very deceptive.
You got to see lots of different areas, on both Islands, good on you!
Just curious which area did you end up buying in??? If you don’t want to say, that’s fine.
Anyway, best wishes with NZ IP number 1 and thanks for sharing your trip with us!! We are going again in April, and I’m sure that I will notice a big upward change in prices etc.
Regards,
Del [biggrin]Hey Ozi,
Welcome back, well done on your purchase, are you prepared to give us any details of where it is, how many bedrooms etc, what price, what yield etc?
What were your impressions of Wairoa and Hawera in particular?
I’m planning a trip to the north island in April, I have not seen my IP’s yet and I’ve had them since last June. [blink]
BTW who did you fly with, what was the ticket price and what did you do for accommodation?
Thanks for sharing your trip details so far.
Cheers, Nobleone. [biggrin]
“Making mistakes is just another another tool for learning.”
Hi Del,
Thanks! Yes, the cost of the trip was well worth it. Even though I was there purely for business, I couldn’t help but take in some of the sensational attractions and scenery NZ has to offer too
It’s a lovely place!The property I purchased was in Invercargill. Actually, I may have jumped the gun a little saying I bought it. I just got off the phone with the solicitor. Basically I have put in an unconditional offer to the vendor (after getting my builders and finance done of course), and agreed on purchase price with the vendor too. However, the garage doesn’t have the permit signed off yet by the council, so I made it a condition in the purchase contract that this gets approved by the vendor before settlement. Anyway, the vendor hasn’t quite confirmed yet, so it’s kind of up in the air still, but I think it should be ok.
Fingers crossed.
Regards,
OziHi Nobleone,
Even though numbers etc aren’t all that important, I’d be happy share specifics, but I’ll hold back until it is confirmed that the vendor has signed (see my previous post).
Originally posted by Nobleone:What were your impressions of Wairoa and Hawera in particular?
Hawera:
A great little town. Appears to be very stable and the economy looks good. Rental demand is very strong with very low vacancy rates for 3+ bedroom homes, with garage. I loved this town and basically, I it’s a place where i’d feel comfortable buying.Wairoa:
Also a nice town, however not as nice as Hawera Once again, rental demand is very strong.From both of these towns, it was very difficult to find good returning properties. Pretty much every agent I saw had nothing spectactular available on their books.
Good luck with your trip over to NZ. I think you will be quite happy with the locations you have chosen.
Regards,
OziGood Stuff Ozi
I’ve been here for a week working and now have 2 weeks to have a look about for properties myself.
I’ll be concentrating on Rotorua and Wanganui (and surrounds) as I narrowed my research to those areas. I’ve been quite ill so I am also trying to take a rest and have a holiday too while I am here.Anything you would like to add on those areas?
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I know I can, I know I can
Hi Gramyre,
Yes, I can add a little about Wanganui and Rotorua. Personally I loved both these areas, although Wanganui sort of switches off after about 5 – 6pm, there isn’t much to do.
Wanganui:
* Nice quiet town, not to busy.
* There wasn’t really much property with high returns available when I was there. Prices have come up. Around 8% seems to be the norm.
* There are some really rough areas in Wanganui, gang activity, etc… Get in contact with a few of the property managers and ask which areas to avoid. I forget the names of the areas, but one of the property managers drew a big circle around the town map and said “if you stay inside the circle, you should be fine!”.
* I think there is one main high school in Wanganui. To be elegable to go to this school, you need to live in the high school zone. This is very sought after with renters! But expect to pay a premium for property in this zone.Rotorua:
* Very touristy, didn’t like the traffic too much
* The market is very hot. I found that there wasn’t much around below $100k, and the ones that were available were either very run down or in a bad area.
* Prices have come up a lot in the past 6 months I’ve been told. Rents haven’t kept up. You will struggle to find anything returning above 8%, unless you buy a cheapy and do it up. Interestingly, one of the agents I spoke with believes rents won’t increase by much, if at all. Because of the lower socio-ecomomic backgrounds of most locals, low incomes, etc, she seems to think there is only so much they can afford (?).
* The two rough areas i’ve been told to avoid are Fordlands and Ngapuna (spelling?). After driving though Fordlands, I can see why this is. I wouldn’t buy there, but then again others have and had no problems. Sure yeilds are high, but that comes at a risk!
* Get in contact with Richard from Rotorua Rentals. He will tell you where to buy, where not to buy, and what to buy!Regards,
OziI loved Wanganui city and could see masses of potential to develop further touristy things like restaurants by the river (why is there a fruit/vege warehouse hogging all that riverbank? Given the money their little patch would be something else all together). The residential wasn’t too bad either. We avoided the gang area (over the river and north) and we took a spin down to Castlecliff to suss out what everyone is avoiding (another industrial area next to the sea! and the houses looking at a horrible view).
The PMs were very friendly and claimed that 100’s of Aussie investors had been there in the last 2 years. We just couldn’t find what we were looking for as demand is still outstripping supply (darn it I was hoping for a bit more cooling before we got there) even in the specialised niche we have hoped to attack.
Know the place fairly well now so will be calling on a weekly basis to keep the agents looking….
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I know I can, I know I can
Hi guys
nice to hear your NZ reports, and yes we are finding the same. Re: your comment Richard from rotorua rentals, don’t forget he is Chairman of the Rotary type person and a rental manager. His agenda of telling you ‘what you should buy’ will suit what he wants (good house, upper rent market, easy to let to top executive tenants) which is not necessarily the same thing that you want (a great investment).
cheers-
Mini
It’s a lovely place!
Once again, rental demand is very strong.
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