Buying a Home
New Zealanders are renowned for being passionate about their homes. The level of individual home ownership is amongst the highest in the world.
Housing stocks are extensive and provide an unusual range of opportunity for those seeking to match their home to a particular lifestyle. Rural 'lifestyle blocks' comprising custom-built homes with several acres of farmland are particularly popular. Most offer easy access to the main urban centres. City housing ranges from restored villas, dating from the early 1900s, to modern suburban homes with large gardens, or 'sections' as they are termed in New Zealand. Inner city apartments, featuring the latest in metropolitan living, have also become a feature of the major cities.
Most urban homes are stand-alone and built of wood. Although many are insulated, most do not have central heating or double-glazed windows. Most have open fires, wood burners, gas or electrical heating.
Prices for homes in New Zealand vary considerably. A lot depends on where they are located – homes in Auckland, for example, are generally more expensive than homes in Wellington. House prices in smaller cities and towns tend to be less expensive. Costs also vary within neighbourhoods and it is important to find out as much as possible about an area before purchasing.
Banks and financial services organisations offer a wide range of mortgage options and combinations. Bank processing is efficient and mortgage finance can be arranged within as little as 24 hours. The rate of payment and value of your mortgage is dependent on your financial circumstances. However, mortgages are usually at 80% of the property's sale price. The mortgage market is highly competitive and it is well worth shopping around for the best deal.
A good place to start is Real Estate New Zealand
website which provides an up-to-date survey of mortgage interest rates.
Each year the territorial authority (local or regional council) provides owners with a 'rating valuation' – what they consider the property (land and buildings) is worth. Local authorities use the rating valuation to set 'rates', which property owners pay to cover water supply, road maintenance, rubbish collection and public services such as libraries, parks and swimming pools. The rating valuation is often used as a guide when setting the sale price. However, houses can sell for more or less than the rating valuation – the selling price will depend on market demand, interest rates and when the rating valuation was completed.
FINDING A HOME
Take time to look around and become familiar with the market. As a new migrant, you may wish to purchase a home immediately, because you feel this will help you and your family feel more settled. Although this is understandable, do not let the urge to settle or any sales pressure unduly hasten your decision. Buying a home is an important decision and should not be taken lightly. Once you have acquired a good knowledge of the local market and are sure you have found what you want, buying a home can be completed within three or four weeks.
Special property features are run in the Wednesday and Saturday editions of most major newspapers. A range of free publications providing illustrated property listings is also available from real estate companies. The Real Estate Institute provides national listings.
Most houses are sold through real estate agents who operate on sales commissions. These are agreed with the vendor before the property is offered for sale and generally 4% of the sale price. Please check with your estate agent what their fees are as they differ from firm to firm. Agents will make appointments for you to see specific properties – they will usually also provide transport if requested. You may use any number of agents, but when you decide to buy you will deal only with the agent managing the sale.
People who are selling their houses often hold 'open homes' at the weekend so you can visit the house without having to make an appointment with the real estate agent. 'Open homes' are usually open for up to two hours – the times are advertised in the local paper and weekly real estate publications.
A real estate agent, not the owner, will be at the house during the 'open home'.
THE SALE PROCESS
Since property law varies from country to country, it is often advisable for migrants to use an experienced property lawyer. This is not a legal requirement but lawyers can protect your interests and guide you through the sale process. Their services generally include:
helping you negotiate the purchase and the price with the current owners
a 'title search' (to make sure there are no legal problems with the property)
checking the sales agreement
advising you of any tax factors that may affect you
drawing up the documents to transfer ownership
arranging the settlement
letting you know your rights.
These services can also be provided by real estate agencies and conveyancors specialising in private sales.
MAKING AN OFFER
When you find the house you want, you will need to make a formal offer in writing (your real estate agent, conveyancer or lawyer will have a standard form). It is usual to have your lawyer look over the offer before it is presented to the agent or the seller.
The offer document will say which 'chattels' go with the sale – this may include curtains, light fittings, oven and dishwasher. The chattels are negotiable. There can sometimes be several counter-offers, so your proposed purchase is not a certainty at this point. Most first offers are 'conditional'.
The conditions may include:
finance being approved
a satisfactory independent valuation
a satisfactory title search
a satisfactory building inspection
a Land Information Memorandum
sale of another property.
A deposit – usually about 10% – is paid to your lawyer or real estate agent when an agreement to purchase is reached. The lawyer, conveyancer or real estate agent is legally required to hold the deposit for a minimum of ten working days or until the conditions of sale are met.
The contract will also state the 'settlement date' – this is the date when the house becomes your legal property, and you can move in. It is when your lawyer pays the final purchase amount to the seller. Once everything is in order, the contract becomes unconditional. There are penalties if the sale does not go ahead.
BUILDING INSPECTION REPORTS
Building inspections undertaken by local councils.
Building inspections completed by private consultants.
LAND INFORMATION MEMORANDA (LIM)
Land Information Memoranda are provided by local councils. Listings in The White Pages under 'Local Government Services' or visit ‘Local Government New Zealand’ website.
Make sure your house insurance starts on the day you take possession of the house. In some house auctions, insurance risks pass to the purchaser immediately upon purchase.
GOVERNMENT SITES / FREEPHONES
Housing New Zealand Corporation
Provides subsidised rental accommodation to those on low incomes. Freephone: 0800 801 601
Land-online Survey and Title Office
Database of land title and survey information - available on user-pays basis.
Department of Building and Housing
Comprehensive information on building regulations and controls.
Freephone: 0800 242 243
Tenancy Services division provides free advice on all aspects of renting.
Mediates rental disputes, manages tenancy bonds and supplies standard rental forms. Local offices listed in The White Pages.
Freephone: 0800 83 62 62 (0800 TENANCY)
REAL ESTATE AGENCIES
Real Estate Institute of New Zealand
An essential site - deals authoritatively with all aspects of property purchase and rental. Up-to-date price surveys available on national, regional, city and neighbourhood levels. Individual reports on rates, sales history, property history and comparative valuations (e-valuer) available for a modest fee. Freephone: 0800 732 536 (0800 REALENZ)
Real Estate New Zealand
Property buying guide for immigrants and overseas investors.
National directory providing virtual tours of hundreds of properties.
NATIONAL REAL ESTATE COMPANIES
Barfoot & Thompson - www.barfoot.co.nz
Bayleys - www.bayleys.co.nz
Ray White - www.raywhite.co.nz
Harcourts - www.harcourts.co.nz
New Zealand Herald newspaper- www.nzherald.co.nz/property
TradeMe Property- www.trademe.co.nz/property/
New Zealand Registered Architects Board
Maintains database of registered architects.
Building Research Association of NZ Inc.
Funds research to strengthen the building industry.
New Zealand Institute of Building Surveyors Inc.
Represents professional building consultants - provides list of services and affiliated members.
Freephone: 0800 11 34 00
Insurance Council of New Zealand
Provides comprehensive guidance on all aspects of property and other insurance matters. Lists affiliated members.
New Zealand Registered Master Builders Federation
Lists certified master builders and useful information about building a home.
Freephone: 0800 762 328
Certified Builders Association of NZ
Lists Registered Certified Builders and provides advice for home builders.
Freephone: 0800 237 843
New Zealand Institute of Architects
Professional association of architects - lists affiliated architects.
New Zealand Property Institute (NZPI)
Sets standards for property valuers. Maintains database of affiliated valuers.
Responsible for the rating valuations in New Zealand.
Freephone: 0800 787 284 (0800 QV RATING)
Association of independent valuing firms. Freephone: 0800 825 476 (0800 VALGROUP)