Professional Real Estate Associations in New Zealand
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Financing a Property
Foreigners can obtain mortgages from New Zealand banks. Deposits of 30-35% of the purchase price are command depending on your financial circumstances and on the following conditions:
- You must be able to give documentary evidence of your equity
- You must be able to prove your overseas income
- Bank statements showing satisfactory account conduct
- You will have to appoint a NZ Solicitor with a Power of Attorney
For information about residential and commercial market conditions in New Zealand, click here
Buying a Property
There are few controls on foreigners buying property in New Zealand. Overseas investors only face controls if they wish to buy large tracts of agricultural land. There are no restrictions to buying normal residential, commercial or industrial property. Foreigners can either buy existing property or build on land they have purchased.
Generally, the vendor pays the agent’s fees which are almost always on a percentage basis. With commercial leases, the landlord generally pays the agent’s fee on a percentage basis, but with residential lettings, the fee, which generally equates to one week’s rent, is usually paid by the tenant.
Payment is due, in the case of a sale, lease or letting, as soon as the agent has procured an unconditional and enforceable contract for the vendor or landlord. If the purchaser or lessee subsequently defaults on the contract and does not settle the sale or lease, then the fee is still payable. “Settlement” generally equates to the giving and taking of possession, along with payment of the balance of the purchase price in the case of a sale.
There is a “Torrens System” of land registration in New Zealand. The Land Transfer Act 1952 provides for State guarantees of registration of an interest in real estate and as to survey. Virtually all land in New Zealand is registered under this system although a few small pockets of properties are still registered under the old deed system which operated when the country was first settled by Europeans.
The register is available for search by the public and details of the registered proprietor, mortgagees, charge holders etc are fully available. The government has computerized the land registration system for the whole country and it is now possible to search all titles through the web and register new interests on line.
Real Estate agents’ fees in New Zealand are negotiable, scale fees having been removed in the late 1980s. Typical fees on a scale would generally be in the range of 3.5% – 4% plus GST. Residential tenancy would generally attract a fee of one week’s rent plus GST and a commercial letting would attract a fee of around 13% – 15% of the annual rental depending on the term of the lease.
For detailed information and professional advice about buying a property in New Zealand, consult a member of ICREA’s member association, REINZ.
Other Industry Sources
For information about the land registration system in New Zealand, click here