New Zealand Home Buying Guide: Key Steps and Tips

For those new to NZ, buying a home is a key step in settling in and making your new life feel more secure. Here's how the buying process differs from UK and the things you need to think about.

The key hurdle you will need to clear is the type of visa you are on. If either you or your partner is a NZ citizen then you're fine to buy. If not you will need to be on a resident class visa.

Theoretically you need to have been in the country for 1 year before buying but if you have the right visa, you can apply to the OIO for an exemption to buy within a year of being here. We help clients do this and have had a 100% success rate, and approvals have been achieved very quickly.

Planning is pretty key here so work together with us and a great lawyer right from the outset so that you encounter no surprises as you move forward. We can refer you on to excellent lawyers who will sign you off at the end of the process.....we want you to be aligned with them before you even start the process.

The buying process is a fair bit smoother in NZ. Once we have established that you can buy, we will go out to 2-3 banks for pre-approval. If you get this it means the bank likes you and have given you the green light, but they reserve the right to dislike whatever property you choose.

Approval isn't based on a multiple of your income but instead on your income less your expenses. You don't need to get a credit card to prove your credit worthiness to banks. That's a giant myth. You are better off not having a credit card at all as having access to the credit counts against you. It's easier to be on PAYE income than to be self employed and try not to use your overdraft.

If you have a deposit 20% or above it will be a lot easier and you'll access the best rates, but it is workable at a 10% deposit, sometimes less.

Banks will pay you a cash contribution which surprises a lot of Brits. Up until the lockdown we were securing cash contributions for clients of 0.8% of the value of the loan which ties you into the bank for around 3 years usually. Some people choose to move banks at the end of that 3 year period and get another cash contribution. It's not a bad idea if you are prepared to do another application and change banks. We find the banks that do offset facilities are the most effective for clients who want to get their mortgage paid down earlier and we work with them over the years on that optimum structure.

Once you see a property you want to buy, put an offer in conditional on finance and subject to due diligence. 10 working days is the standard time frame for these conditions. This allows you time to have the bank sign off on the property and for you to get builders report completed and work through any issues your lawyer flags up. If you sign a sale and purchase agreement with the vendor, you won't be gazumped during these 10 working days and face the disappointment of the vendor taking a better offer from someone else.

Before the 10 working days are up you need to be prepared to go unconditional, and committ some deposit money. We want to be sure by this point that everything is in good order and any conditions or issues are satisfied.

Once you go unconditional, it is then a case of waiting until settlement date which might be a month or so later but the timeframe can vary. We will get interest rate pricing offers plus cash contributions from all of the banks and work back with you on the best strcuture to take and look at which bank is the best fit. You definitely want a great lawyer throughout this process. We've found lawyers outside of Auckland who seem to have more time, lower charges and just make the purchase process run without a glitch. Your lawyer will meet with you to arrange the mortgage drawdown from the bank and do what is required to have you registered as property owner. Your lawyer will need to sign you off as meeting the criteria to be able to buy in NZ so there shouldn't be any stress at this stage because you engaged with the lawyer on this before you even started going to open homes.

We will stay in touch with you to help you reach whatever goal you have from this point. It might be to reduce your mortgage and grow your kiwisaver and other investments. It might be to plan for an investment property purchase. We work with you on the next move and will have recommended the bank that is most suitable for the next move.

Hopefully that is a simple overview on how the property purchase process works but just reach out if you have any questions at all.