Familiar yet different, New Zealand is a home from home. This beautiful country is about the same size as the UK, but the population is little more than four million. They also drive on the left and enjoy four traditional seasons with hotter summers and milder winters. These favourable comparisons, together with the prospect of a better quality of life, are galvanising many Brits to island hop to the other side of the world.
Net migration to New Zealand reached a record high of 47,684 for the year to October 2014 – a significant turnaround in the country’s situation, given that just two years ago, it was experiencing a decline in net migration with 2,300 more people leaving than arriving. Since 2012 New Zealand has seen annual migrant arrivals increase by around 22,000 a year, while departures have declined by around 26,000 a year. The largest sources of international migrant arrivals are Australia, the UK, India and China.
The country is consistently rated as one of the best places to live in the world, with locations like Auckland regularly in the top three cities to live for quality of life (Mercer Quality of Living Survey).
The Emigration Group says that there has, in fact, never been a better time to move to New Zealand. The country is enjoying a booming economy thanks to a number of growing industries but this has created a number of skill shortages that offer a brilliant opportunity for British families to migrate and enjoy great career prospects and a much better work-life balance.
Eligibility criteria for mortgages are quite good, and you can still generally borrow up to 70 per cent of the value of a property and the minimum loan is NZ$100,000. Rates currently start at 5.3 per cent. Banks in New Zealand banks tend only to lend up to a level where the property can be serviced by New Zealand based income, but will make exceptions for high income earners working in strong industries in developed countries. Income earned overseas will be reduced by 20 per cent for exchange rate fluctuations.
As always, it’s imperative to take professional advice before making any decisions. Prospective buyers should always go through the same process that they would follow if they were buying a property in the UK, and this includes consulting a good independent lawyer, and ensuring that an independent valuation of the property takes place, even if it’s a cash purchase. There’s nothing to be gained, and everything to lose, by cutting corners and taking unnecessary risks.
Interest rates for non-residents are the same as for people living in New Zealand. For people living overseas looking to invest in New Zealand property before either returning there or emigrating there, the property being purchased will ideally be self-servicing from rental income received (bearing in mind that rental income is shaded by banks at 75 per cent of the income received). For properties which are not self-servicing, New Zealand banks will shade overseas income by 20 per cent to allow for exchange rate fluctuations. Surplus funds should be maintained in a New Zealand bank account to budget for tenant vacancies, property maintenance, and Council rates.
One of the most effective ways of obtaining a mortgage for a property purchase in New Zealand is to use a specialist broker in the UK. They’ll know the exact mortgage application requirements and can source the best possible deal. It can also put buyers in touch with specialists in New Zealand, to ensure that they comply fully with planning and legal conditions, and can also assist with currency exchange.