The 5 best ways to live, retire, or profit in New Zealand
By Rick Rule
Article Courtesy of: http://www.internationalliving.com
NZ$1 equals US$.50
After travelling to New Zealand for 25 years, I’ve identified what I believe are the country’s five best ways to take advantage of all it has to offer.
They are, in no particular order:
1) buying and selling property around Auckland, Queenstown, and the Bay of Islands
2) living or retiring outside of Auckland, Gisborne, or Christchurch 3) owning a vineyard or orchard in Marlborough or Hawke’s Bay
4) buying and renting a vacation spot around Queenstown or Lake Taupo
5) turning a sheep station into a softwood forestry project
New Zealand is one of my favorite places in the world. It’s a lot like the western coast of the United States, only turned upside down. The North Island is tropical, like San Diego…the South is cool, like Portland or Seattle.
As a California native, I have a funny requirement when looking for a place to live, work, or “retire.” It’s this: I look to see whether or not avocados grow there. You see, avocados like it warm…with lots of sunlight. So do I. So if they grow there, I know I’ll at least like the weather. Avocados grow very well in northern New Zealand. Besides the weather, I also like the country’s wide range of topography—there are snow-capped peaks, rain forests, crystal-clear lakes and rivers (and some of the world’s best trout fishing), bays filled with (habitable) forested islands, vineyards, fruit plantations, and other amazing scenery. I like its small, but literate population, the friendly people…and the fact that the country is, for the most part, clean and uncluttered. And, like me, New Zealanders love the outdoor life…camping, sailing, barbecuing, swimming, or simply gardening.
In fact, I like the place so much that I decided a few years ago that I wanted to own a piece of it. So I bought property here last year. I went in with a friend and bought 1,300 acres on the East End of the North Ireland, about an hour from Auckland. And as I spend more time here in the years to come, I’ll be looking to get involved in some of the opportunities I mentioned above. Most of my business, however, is still in the U.S…at least for now. So I’m not spending much time in New Zealand. But I have a plan. Within the next three years, I’d like to be able to spend at least three months of the year there…and in another five years, I’d like to spend at least half of my time on my new property. That’s my plan anyway. I went into the project with one of my best friends, and I think we both have a vision of spending our later years on this big tract of land. I’d like that very much.
Laissez-faire benefits
Now is a good time to think about living or investing in New Zealand because the country still hasn’t recovered from the 1996 Asia crisis, which knocked as much as 50% off real-estate prices in some places. Plus, the local currency has fallen as much as 25% against the dollar. This country was almost destroyed by socialism and is only in the past few decades making a recovery. In fact, it wasn’t too long ago that the government dictated that all hotels close at 6 p.m. (they were forbidden to sell liquor)…and a strict 40-hour work week meant that shops’ hours were strictly controlled. In the 1970s and early ’80s, the country was in bad shape. Inflation was around 17 percent per year. Unemployment at one point reached 130,000 and the country’s debt was over $14 billion. Then in the mid 80s, a new government took over, got rid of farm subsidies and import licenses, and generally adopted an economic laissez-faire policy.Both New Zealand and Australia turned their attention to the Asian economies, which is why they were hit so hard by the Asian crisis.
Rental properties that return 12%
Auckland has more people than the whole South Island…and it’s really the only place in the country with anything resembling an active real estate market. So if you want to invest in a property you can soon sell or rent, look in and around the city.Except for high-end real estate, the market is still very flat—and you can find excellent bargains. For example, in Manurewa, there’s a beautiful 3-level, 4-bedroom home, with all kinds of modern amenities, situated in some lovely gardens, for NZ$235,000 ($117,500). To see it go to http://www.harcourts.co.nz/buying/fr_buy.html. If you want investment properties, you should be able to find, with a little bit of effort, a rental property that generates a 12% net return. For example, if you buy a place for NZ$200,000, it’s not unreasonable to think that you can make NZ$24,000 a year on rents.
For speculative properties, I’d stick to the areas around Auckland, say, within an hour’s drive of the city. If you’ve got a lot of money to spend, I’d recommend you look at the Bay Of Islands, which consists of about 150 islands. I saw a home here not too long ago, a big beautiful house on about 50 acres, selling for roughly US$350,000.Here you’ll find unspoiled beaches, kauri forests, and some of the best sport fishing in the world. New Zealand waterfront is very cheap by U.S. standards. If I was looking at a property for an investment, I’d look around Auckland, in the Bay of Islands, or in Queenstown, which is on the South Island, on Lake Wakatipu. Recent legislation has made property buying fairly easy and straightforward. You can get title insurance. And there’s a well-developed mortgage industry, so even for foreigners it shouldn’t be a problem to arrange financing. Only if you are purchasing a really large piece of land on the ocean near Auckland will you encounter any red tape. For this kind of property you’ll need the permission of the Overseas Private Investment Council. This group exists because there’s a nervousness in New Zealand that first the Japanese, and now the Americans, will buy up all of their land and drive the natives out.
4-bed, beachfront house: $142,500
If I was looking for a place to live or retire in New Zealand, other than Auckland, I’d also look at the areas outside of Gisborne and Christchurch. Gisborne, on the far eastern coast of the North Island, is the first city in the world to greet the sun each day. Here you’ll find lots of sun, and many parks, beaches, and bridges. Right now, there’s a four-bedroom home for sale in Okitu, outside of Gisborne City, for NZ$285,000 (US$142,500). You could eat breakfast on the East-facing deck, as you watch the sun rise. Available through Harcourts. Another place I’d like to live is Christchurch, on the East coast of the South Island. This city has literally acres and acres of gardens. It’s a laid-back place, and many artists have settled here. It’s also done a good job of attracting tourists, so properties in town can be quite expensive. I’d recommend you look outside of Christchurch, perhaps going even as far as Akaroa, 50 miles southeast of the city. (Editors note: Look for more details on Akaroa next month.)
Your own vineyard
Two of the best places to grow grapes in New Zealand are Marlborough andHawke’s Bay. Marlborough is one of the country’s most important wine-producing regions. The place hosts an annual food and wine festival, is home to one of the country’s biggest wine makers, Montana, and gets lots of sunshine to grow big, fat grapes. This area is famous for its Sauvignon Blanc, but is also capable of making Merlot, Riesling, and Chardonnay.
My other choice for vineyard property is Hawke’s Bay, on East side of the North Island. The vineyards here produce excellent Cabernet, Merlot, and Chardonnay. Right now, near Hawke’s Bay, there’s a four-bedroom home for sale, with a 4-hectare block ideal for growing grapes, for NZ$310,000 (US$155,000) (Harcourts Realty).
World’s best trout fishing
If you’re looking for a place to have a vacation home, where you can escape the modern world, I’d look around Lake Taupo and Queenstown. Lake Taupo, on the North Island, covers about 230 square miles—and it’s the most famous trout-fishing lake in the world. Five hundred tons of the fish are pulled from here each year. I’d love a place along one of the rivers leading into the lake. They are equally well stocked with rainbows. You should be able to find a very nice house here for $150,000 or less. You should be able to buy land along the rivers for as little as US$400 an acre.
If you like outdoor adventure sports, go to Queenstown. Here you can go white-water rafting, jet-boating (these propellerless boats zip up and down the river in a foot or two of water), canoeing, windsurfing, water-skiing, catamaran sailing, bungee jumping (one of the highest bungee jumps in the world is at Skipper’s Canyon). If you want slower activities, these streams are also excellent for trout.
Sheep station to tree farm
Another project I’ve thought about in New Zealand is buying a sheep station and turning it into a softwood tree farm, where you could easily grow Douglas firs, even California redwoods. The wool industry has been decimated not only in New Zealand, but also around the world, because of synthetic fibers. New Zealand’s sheep population, which once stood at 70 million (the world’s largest), has dropped to 35 million at last count. Near Queenstown, there’s a little area called Glenorky. The area between Glenoray and Queenstown would be perfect for this kind of investment.
I may get involved in one or more of these things in the coming years. I’ll almost certainly buy and sell other parcels of land. But for now, I’m content to simply hold onto what I’ve got. I’ll develop a small house first, one that will later be used for my guests, while I figure out exactly what kind of larger house I want to live in. IL
Contacts
For property listings, use Real Enz, the country’s biggest real estate web-site: http://www.realenz.co.nz
Harcourts; tel. (64-9) 520-5569, Fax 524-7059 E-Mail: [email protected] eb-site: www.harcourts.co.nz
First Published: Sep 15, 2000