Despite the economic crisis triggered by the Coronavirus pandemic in 2020, the New Zealand property market is booming. In an attempt to reinvigorate the economy, the central bank began offering lower than ever borrowing costs. As a result, more and more buyers are entering the market, leading to higher house prices.

The downside of the low-interest rates is that houses are becoming prohibitively expensive for people on lower incomes. This has become a political issue, with politicians accusing the reserve bank of inflating prices.

However, New Zealand remains a great market for property investments with its relatively low realtor fees and lawyer costs. These investments are a safe bet since property prices have risen significantly in some areas over the last decade. When navigating the New Zealand property market, it’s important to be aware of a few do’s and don’ts. Here are a few tips to follow when accessing and buying a property.

Settle On A Budget

The first step to take once you decide to invest in property is working out your budget. This involves understanding your current financial status. There are several factors that come into play such as your savings, income vs. spending and the amount of equity you have in any existing properties. You will then need to weigh up what you have against the amount required for your deposit. If you’re looking to sell your current property first, you will need to get it appraised.

Get Pre-approved For A Home Loan

If you plan on opting for a home loan, contact your bank to find out how much money you are eligible to borrow. Getting pre-approved for a home loan offers several advantages. It will not only speed up the documentation process but also put you in a better position to negotiate.

The amount of money your bank or financial institution agrees to give you depends on several factors. Your current income, the amount you can put down as a deposit, the equity of your existing properties and the value of the property you’re planning to purchase, all have a role to play in the amount you can borrow.

Do Your Research

Before purchasing a property, it is important to understand the real estate landscape of the area you’re interested in. Notice the types of houses that are selling in the region and get an idea of price fluctuations. There are several websites you can use to understand market trends and get the latest valuation information.

It’s also a good idea to talk to residents of the area and understand the pros and cons of living there. They may also be able to give you an idea of the prices and connect you with realtors they trust. Their first-hand experiences may have an important part to play in influencing your buying decision.

Hire The Right People

The right people can make the property purchasing process run smoothly. Once you have an idea of your budget, contact your bank manager to find out how you can get pre-approved for a home loan. It’s also prudent to seek legal advice from a solicitor. They will have in-depth knowledge of the property market and will be able to guide you on the legalities involved.

A solicitor can also help you perform the mandatory property checks or put you in touch with the right experts. Finally, hiring an experienced real estate agent may help you mitigate some of the risks that come with property buying and also get you the best deal possible.

Find A Property That Meets Your Needs

If you are new to property hunting, a good place to start is online. There are a number of websites that have listings from homeowners and real estate agents. The next step is to look out for listings in brochures and newsletters in your chosen area. Some local properties may only be listed in these. Also, check the websites of real estate companies and agents in the region.

If you can’t find what you’re looking for through these avenues, get in touch with an experienced real estate agent who will be able to offer guidance and advice. Your search for the right property can take time. So avoid rushing into a decision and make sure the home ticks all your boxes.

Inspect The Property Thoroughly

Once you’ve found a property you like, conduct all the necessary checks before putting in an offer. You can get more details on the home by getting a Land Information Memorandum (LIM) report from the local council. This must be reviewed thoroughly by your solicitor for any discrepancies.

The LIM report will also contain important information related to the land, such as contamination or erosion. It will also layout zoning details explaining what you can and cannot do with the land. Buying property is a big investment and you should only make a formal offer once you’re aware of all the facts. Being meticulous about inspecting the property will help you avoid any problems down the line and potentially save you a lot of money.

Final Thoughts

Purchasing a property in New Zealand is relatively straightforward. Once you’ve found the property you want, it only takes a few weeks to complete the process. Buying in the country is less stressful than in some other parts of the world because of the many laws and regulations in place. For instance, once your bid has been formally accepted, the homeowner cannot entertain any other last-minute offers.

However, the process of buying a property can come with a few challenges. When you’re ready to take your first steps towards homeownership, be sure to follow the pointers mentioned above to cover your bases. This way the process will be smooth and stress-free. You will also be able to avoid the common pitfalls that come with investing in property. It will all be worth it in the end when you have an asset you can be proud of.

Leonard Ross is an established property developer in Auckland, New Zealand.