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| Buy
properties |
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New Zealand |
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House in
New Zealand is the preferred
way of living. If you ever get the chance to go up the
Auckland tower, you will see a sea of houses as far as your
eyes can see. The house for the New Zealander is a castle,
it is where they raise and play with their children in the
backyard, care for their gardens on the weekend, use their
garages as workshops, and where they have their comfort and
privacy, and also their investment. Apartments don’t have
the same privacy as a house and also have many neighbours,
sometimes very irritating ones. Apartments are mostly used
by younger people, who are starting their lives, but even
then for a short time, waiting just enough time until they
can have 10% to be able to ask for a mortgage.
A mortgage
is the name given to
a loan made for a house. Most banks give out home loans,
with most loans being taken out for around 25 years. For a
bank to agree to give a home loan (or mortgage) the person
needs to put in at least 10% of the value of the property,
and then bank will loan the rest. The interest rates charged
is normally in accordance with the government interest
rates. Interest rates in 2005 was of 4.6% per year. It has
once been as high as 9.6%. Until the mortgage is paid in
full, the house belongs to the bank. If in the middle of the
mortgage you decide to sell the house, you will need to
firstly ask the bank, and when the house is sold you will
need to pay the rest of the amount owed to the bank,
anything that is left is yours. The mortgage is paid like as
if you were renting the house, and how much you pay per
month will depend on different factors. For example, if you
put in 50% of the value of the house and borrow 50% fro the
bank, then you may reduce the time to pay for the mortgage
from 25 years to 10 years, with possibly a lower interest
rate. As
renting a house monthly will not give you nothing in the
end, most kiwi opt for the mortgage option so that their
monthly payments are actually going towards their ultimate
goal of owning their own house.
When
decided to take out a mortgage,
it is important to shop around to get the best rate, and
save the most money. If you don’t want to go through the
trouble, you may choose to hire the services of
a mortgage broker, who work exclusively in comparing
rates, and giving you the best advice. Or you can go to
banks and ask about how much you can borrow, and their options.
Normally the bank will want to know here you work and how
long for, how much you earn, how much you can deposit, how
many years of financing you would like to have etc.. once
they have analysed your specific situation they will provide
you with a figure, eg. $378000. This means that now you can
go around visiting the Real
Estate, and look for that dream home. Keep in mind
though that you will probably need around $10000 to be spent
on layers, taxes, registration of the property, certificates
etc..
Auctions of
properties has seen a
huge increase in the last few years. Instead of putting your
property for a fixed price, what you do is you set what you
call a reserve price or minimum price and let the bidders
bid for it until someone
offers the most money, and that person takes it. If the
price of the house does not reach the reserve price, the
owner has the right to reject the offer. The Auction is
taken by a specialised Real Estate agent, who will organise
and advertised a set date and time.
It
is no secret to the
Kiwis that property is a great investment, as almost no
other investment guarantee such positive returns, with
almost no risks. Property in NZ values on average by around
10% per year. In 2003 and 2004 a boom of sales saw some
property increasing in value by 30 to 84 % in a single year,
making some property owners very happy. Much better than
what they would get for putting their money into a savings
account with the average interest rate paid being 5.6% per
year.
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