NZ Property Guide Philippine Real Estate GuideForeclosed Japan Guide
Here are 10 good reasons why not to buy property in NZ by Bernard Hickey at the NZ Herald. I might add a few more if it pleases you, as well as some good aspects:
|St Arnaud Lake, South Island, New Zealand|
More bad news
1. Food prices will perform well in future, though I think Australia will do better with food, minerals and heaps more minerals. Australia kind of has a global monopoly on coal & iron ore development. I can probably identify 60 projects in Australia which have the capacity to last 30 years. There is just so much ore. Even the crappy 30%Fe can be processes simply for 55%Fe. Its not to far from the coast, and there is good infrastructure, and foreign buyers of the stuff prepared to spend money to develop it. There is going to be a lot of money going into Australia. Meanwhile, the Chinese are trying to buy into NZ farming, and voters are strongly against it. So don't expect much foreign investment in NZ.
2. NZ just doesn't have much of a selling point to attract investment. Unless you are a niche medical technology developer, a graphic design or web-based business, you are likely to struggle getting business on the international stage. Its expensive and time-consuming to get to NZ. So is NZ destined to be just a 'retirement hub' where people come to die? I think so.
3. The government finally looks to be doing something about welfare dependence. There are 386,000 NZ'ers on welfare benefits receiving a total of $6.5 billion a year. The biggest rout seems to be single parenting. There 100,000 single mothers who have 180,000 kids among them. No doubt most of them care less about working, and most are going to be terrible role models, embedding an 'inter-generational' culture of welfare expectancies or dependence. The problem is that NZ really has to create jobs for these people.
4. The government is actually making NZ less attractive for retirement by increasing the GST to 15% to fund tax cuts. Having said that most retirees are living on foreign income, and that translates well into low-priced NZ dollars.
1. There is actually the prospect of some low-income Australians retiring in NZ in coming years in order to benefit from cheap housing and falling airfares. This will also have a benefit for Australians travelling here for tourism, and buying holiday houses. In NZ you can buy a holiday house for $NZ80,000 ($A65,000) near the beach, in Australia they start at $A350,000.
2. Some of those NZ'ers working in Australia's mining industry are going to come home to NZ. Particularly if they are working in the mines in WA, where they are less likely to meet girls and settle in the country. They might thus be more inclined to save and return to NZ with a nest egg.
3. The Australian population is growing so much faster than NZ, 2% compared to 0.5%. There is a flipside however. Australian property is highly regulated. You have 21 million people sharing a continent slightly smaller than China, and it restricts urban land releases, which keeps prices artificially high. Subdivision is very difficult in Australia, even in rural towns. This is because local & state governments don't want to fund infrastructure, whilst also allowing 'tax creep' based on property prices. In NZ you can buy property or 'sections' in rural areas, in town for as little as $30-60K, and you can stick an old relocatable home on it for $50K (including expenses), or build a new one for $120,000 plus. In Australia, to benefit from those dynamics, you will need to live over the Great Dividing Range on the Western Plains, some 1000km away from Sydney, and maybe 60km from a large town, in something resembling a 'ghost town' which has lost all its services. You will be pleased when it rains, because that will be the most exciting thing that happens.
Northing else I can think to add. I think it was a good article. Basically I conclude:
1. If you have money or want to make it, you live in Australia
2. If you have money and want to leave it in your home country, you live in NZ
3. If you have no money and no desire to make it, no one wants you.
AuthorAndrew SheldonApplied Critical Thinking | www.SheldonThinks.com