Affordable Properties and the ‘Hobbit Effect’ Increase Demand for New Zealand Property

New Zealand’s stunning scenery was famously showcased in The Lord of the Rings films over the last few years, which ignited interest from overseas buyers in its property market. However, in addition to the country’s scenery, for many people New Zealand represents a safer and more environmentally conscious alternative to Britain, making it the fifth most popular choice for emigration for Britons.

New Zealand has only 4 million residents, despite being the same size as Britain, and the difference in cultures is minimal. For this reason, it is often considered to be like 1950s Britain, and accordingly is popular with those wishing for a more wholesome life but without a huge culture shock. However, the demand isn’t just from those making a lifestyle choice; a significant proportion of Britons wishing to relocate are farmers, hoping to make a better living in New Zealand.

From an investment perspective, the country has plenty to offer. The interest rate is high at 7.5%; however, capital growth in real estate averages 10% annually, which is predicted to continue due to the limited supply of properties. In addition to that, other financial incentives are the absence of capital gains tax, stamp duty, land or inheritance taxes. There is straightforward conveyancing, and purchase contracts are bound with a 10% deposit so there is no gazumping.

The most expensive city of New Zealand is Auckland, where the average house price is a modest £131,000. Studios are available for around £86,000 and are capable of generating £140 a week in rental income.

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