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How much money can I borrow to buy a house? How much money can I borrow to buy a house?
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Renting a Holiday Home - Q & A

I’m planning a holiday. What do I need to know when renting a Holiday Home?

Renting a bach or holiday home for a short-term holiday can be a great option. Renting is often cheaper than staying in a hotel, offers more privacy, and can be the perfect alternative if you have kids and pets (which some hotels do not allow). Here are some tips to help you find the perfect New Zealand holiday home.

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

We want to own our own home. Where do we start?

The first major hurdle on the path to home ownership is working out how big a deposit you’ll need and then saving for it.  New Zealand banking regulations specify maximum percentage amounts that lenders can advance to home buyers, to reduce the risk of financial hardships and defaults if property prices fall.  Any difference between the property purchase price and the advance will be the deposit needed.

Whilst these percentages move around at times, you should aim to have a 15% to 20% minimum deposit to buy your own home. When buying a home for the first time, follow the helpful advice below:
  • Calculate how much you can realistically afford to borrow, and how any debt servicing requirements / rates will allow you to live reasonably comfortably.
  • Consult a financial advisor, friend, or family member who has bought property before. Seek out as much advice as possible.
  • Don’t financially over-commit when buying your first home. A bank or lending institution may be willing to lend you a larger amount, but you should not necessarily take the offer. Know your budget and stick to it.
  • Ensure that you have financial reserves to cover things like legal costs, moving in (and out costs), unexpected repairs and maintenance etc. 

We’re separating. What will happen to our family home and other assets?

In New Zealand, the Relationship Act covers how the family home and other assets will be divided when people get divorced or end a serious relationship. If your relationship qualifies (see the Ministry of Justice website for details), your family home will likely be treated as “relationship property”.

If you and your partner can’t decide on how to divide your assets, the Family Court will make a ruling. The Family Court will typically rule that all “relationship property” be split equally.  There can be exceptions to this, where an equal split would be unjust or where one of the partners would be seriously disadvantaged.

You should consult a lawyer for more advice about your specific circumstances. 

How do I figure out where to live?

If you're moving cities due to a job or career change, it makes sense to live as close to your place of future employment as possible. To choose the ideal location:
  • Talk with a local employment agency or recruitment company and get some advice on where you’re most likely to find employers suited to your skills.
     
  • If you already know where you’re going to be working, talk to your new employer to find out information about public transport options or convenient road links from the suburbs.  
 
  • Use an online guide, such as the Real Estate Institute of New Zealand website to research statistics, property data and trends in your new area.
     
  • Decide ahead on your budget for renting or purchasing a place to live. Using a salary calculator to work out how much you'll have available to spend each week after tax is deducted can be useful. Once your budget is confirmed, visit http://www.firstnational.co.nz  for comprehensive renting and sale listings.  You can enter your requirements and budget into our search fields, and we'll quickly show you properties for sale or rent that meet your needs.
     
  • Your local First National real estate agent has a wealth of local knowledge, and can help you with relocation advice and services. Contact Us now.

We already own a property. Should we sell it before moving to a new home?

Finding a buyer for your current family home before purchasing a new one is usually recommended, for a number of reasons:
  • If you buy a new property first, you may find yourself in the position of having to make mortgage repayments on two houses at the same time (if your house does not sell in a timely fashion, or for the price you expect).  This might put you under unnecessary financial strain.
  • With your current property sold, you’ll know exactly how much money you’ll have available for your next property.  Being a cash buyer may give you better leverage on the pricing and terms of your new property.
Some financial advisors recommend that you never sell a property, but keep the first property as a rental, and use the income to help finance your next home.  This is only realistic to achieve if you have the sufficient financial means to do so.  Speak to a financial advisor or First National Real Estate agent for advice.

What else should I think about when choosing where to live?

Your choice of where to live is important.  Make sure that you consider local crime rates, and your closeness to public transport, shopping centres, schools and other relevant amenities.  Websites like Quotable Value provide free local statistical information, including breakdowns of the household age groups living in your area.
Where you live can also impact others, so consider the living locations of your friends, families, and colleagues too.

It's important that you calculate the overall affordability of the property for your budget. Affordability is the rent or mortgage payments, along with food, petrol (commuting costs), power, water, rates, and local restaurant prices.  As the prices of these items and services vary from place it place, it's helpful to do some research.

Does divorce resolve property matters?

No it doesn't. A divorce is simply the legal process used to dissolve a marriage. The divorce itself does not address any family or custody issues, or consider how family assets (including property) should be split.
Many partners work out property and custody agreements between themselves, without legal conveyancing. This approach can save time and legal costs, and avoid lengthy court disputes which may be harmful for children.  Where agreements cannot be satisfactorily made, lawyers may be engaged.
Legal cases are normally heard by the Family Court.

What are the key pieces of information I need when buying a first home?

There's a lot of information required when buying a first home, but luckily this information is available from a number of sources.  These sources include banks, insurance companies, real estate companies and financial advisors.

Regardless of whether you are buying a priced property, or a property being sold via auction or tender, it's important to know the following:
  • How much you can afford to borrow to buy your home
  • How large a home deposit you will need (see Question 1)
  • What other costs you will incur during the purchase of the property
  • How to go about making an offer on the property and some knowledge around the possible terms and conditions that can be included within the Sales and Purchase Agreement to give you adequate buying protection
Talk to a friendly First National Real Estate agent for further advice.

How much money can I borrow to buy a house?

It's important to know exactly how much money you can borrow before looking for your first home. This will indicate the prices of the properties you can afford.
  • For your first New Zealand home, you will typically need around 20% of the purchase price as a deposit.
     
  • A bank or mortgage broker can help you establish a realistic figure that you will be able to borrow based on the amount you have already saved and your expected future income.
     
  • You can also use an online mortgage calculator to see how different loan lengths and interest rates affect repayment amounts. Most New Zealand banks offer this functionality on their websites.
     
  • Once you've decided that you're comfortable with borrowing a certain amount, and you've found a lending organisation willing to lend to you, it is sensible to get your loan “pre-approved”. This allows you to make an offer on a house with more certainty that you’ll be able to borrow the funds required.

I’m in a de facto relationship and we’ve separated. Is my property affected?

Under the Relationship Act, if you've been living in a relationship similar to marriage for at least 3 years (e.g. living together in the same property, with joint finances), then your property will normally be treated in the same way as property from an official marriage. 
The relationship period considered may be shorter than 3 years if you have a child together, or if one partner has made significant financial contributions to the relationship (such as buying a house) and would be disadvantaged by an equal split. 

I’m moving from overseas. How do New Zealand’s main cities differ?

New Zealand is a relatively small country, with just over 4 million residents, but it has some of the world's most liveable cities.  Each city is modern, and has its own uniqueness. There's a city in New Zealand just right for you.
  • Auckland is the largest city in New Zealand, and is home to over 1 million people. As the main commercial centre for New Zealand, it also offers the most diverse employment prospects. Auckland has a rich performance and arts culture, and is home to people from a wide range of ethnic groups.  The high popularity of Auckland living is reflected in the Auckland real estate market.  Prices of houses are generally much higher in Auckland than in other New Zealand cities, especially in the more desirable inner city suburbs.
 
  • Hamilton is New Zealand’s largest inland city, and is located within 1 ½ hrs drive from Auckland.  It has a population of 150,000 people, making it the fourth largest city in New Zealand.  Hamilton is the main regional hub for the Waikato farming region, and much of the economy is devoted to rural services. The area is known for outstanding farming research, and the University of Waikato and the Waikato Institute of Technology are both based here.  The manufacturing and retail sectors are popular here too, and are growing.  Hamilton does not have all of Auckland's amenities, but it provides a comfortable and less rushed lifestyle which many people are drawn to.
  • Wellington is the capital city of New Zealand, and is home to the New Zealand Government (housed primarily in the Beehive building).  Most New Zealand senior public sector jobs can be found in this city.  The city itself is compact, with a large number of inner city apartments available for sale or rent. This makes inner city living more affordable than in main centres like Auckland.  Wellington is known as the "windy city" due to high winds which pass overhead from the Cook Strait.  Summer days can however be delightful here.
 
  • Christchurch is New Zealand's second largest city. In recent years, the city has had two main earthquakes, causing a lot of household (and business) damage, but the city is now rebuilding.  If you're a tradesperson looking for work, the job opportunities here are plentiful due to the construction boom.  The Canterbury region as a whole has an unemployment rate lower that 3%. 

    Christchurch also has strong agriculture, engineering, and tourism economies.  Students are well catered for at the University of Canterbury, and at Lincoln University.  House prices in Christchurch have been pushed higher lately due to the constrained supply of housing whilst houses are re-built (or brand new housing is built). This situation is expected to be temporary.
 
  • Dunedin is the second largest city in the South Island, and is one of New Zealand's premier "student cities".  Students make up almost 20% of the population, on which both the retail and tertiary education sector heavily depend.  Dunedin is in close travelling proximity to popular ski fields and tourism areas like Queenstown, making it a popular tourist stop.

    The winter season in Dunedin can be cold, and snowfall is common.  Due partially to these low temperatures, and the city's location near the bottom of the South Island, real estate prices are inexpensive when compared to most other New Zealand cities.  The relatively low population growth in this area may dampen possibilities for longer term capital gains on property, but this also helps to keep rental and sale prices competitive and relatively stable.
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