The term real estate can be quite confusing. There are different types of real estates, such as residential or house properties, commercial or business properties, and investment property or income producing houses.
Not all houses are considered to be real estate. For example, most people would consider a one-bedroom apartment to be less than real estate due to it not having enough space for your belongings. A studio flat is also not considered real estate since you cannot use it to generate an income.
This article will talk about how much real estate there is in New Zealand, what factors determine this amount, and some numbers! So, stay tuned and read on.
History of real estate in New Zealand
Like many Western countries, New Zealand has a history with real estate that dates back centuries. The Maori, an indigenous people of the country, have lived here for at least 700 years, establishing strong traditions of property ownership.
When European settlers arrived in large numbers starting in the mid-1800s, they were met with rich natural resources and growing populations. They soon realized how valuable owning land was and what a popular way to invest money it was.
Since then, there have been three main types of real estate transactions in New Zealand. These are selling or giving away your house, buying or renting another house, and trading up – either by moving into a larger home or investing in the rental market.
Selling or giving away your current residence is called a residential sale. This usually happens when you move out or someone else moves in. Depending on the situation, the seller may get a fixed income per month from the new tenant(s) or agree to stay as a renter until he/she finds their own place.
Trading up means buying a bigger house than you need now. This can be done through buying a studio apartment or condo, purchasing a one bedroom, and so on.
Popular New Zealand locations
Locations that are popular with tourists will see an increase in real estate prices due to their popularity, and thus increased demand.
New Zealand has some beautiful natural settings such as beaches, national parks and mountains. These areas are rich in tourism so they can attract more visitors which then benefits local real estate markets.
Beaches are a very common destination for people looking to relax and enjoy the ocean or take advantage of the surf. There are many expensive beachfront properties in Auckland and Waikiki in Hawaii where large groups can stay.
National Parks like Aoraki/Mount Cook National Park and Fiordland have strong economies dependent on outdoor activities and eco-tourism. They offer day trips and longer stays for those who want to explore the area.
Tourist attractions in New Zealand include watching waterfalls, taking rafting tours, visiting zoos and spending time at wineries and farms. All of these require transportation so there is always something to do!
All of these things contribute to the economy and help create more business for shops and restaurants near the sites.
Average price of real estate in New Zealand
The average cost to buy or rent an apartment or house in New Zealand is just over 6,000 dollars! This includes fees such as brokerage, moving costs, and property taxes.
This doesn’t include things like electricity bills or monthly rents, but it does give you an idea of how much money you need to start investing in real estate here.
By investing early, you will be able to take advantage of lower prices and possibly get some great tax deductions too!
Real estate investment is not for everyone, but it can be very profitable if done properly.
Tips for buying real estate
As we mentioned, investing in real estate is not necessarily the best way to make big money quickly. And while it’s important to understand how much property you can buy and what prices are being asked of sellers, there are some things that can be done outside of this framework to improve your investment knowledge.
Some of these tips focus more on reducing risk and improving financial literacy, whereas others help you find great deals or increase your net worth. No matter which one appeals to you, they all boil down to two key ideas: read about real estate and own real estate!
We will now go over five ways to get better at investing in real estate.
Tips for renting out real estate
As mentioned earlier, being able to manage your money is an important part of investing in real estate. This includes paying bills on time and keeping up-to-date with property maintenance.
As landlords, you’ll also need to make sure that everything about your rental unit is in order and professional looking. Landlords are often criticised for letting their properties look messy or unloved, so keep it clean and put effort into making this place feel like yours.
On the other hand, as a homeowner, you’d want people to believe that you can afford a house like that! Don’t overdo it though, remember, you don’t have to own a home to live a wealthy life.
Renting out your own apartment or house will help you achieve both those goals.
Rent vs buy decision
The main difference between buying and renting is not whether it is better to own or rent, but which option you prefer. Both owning and renting offer benefits, so why should you choose one over the other?
A few key things will influence this choice for most people: how much money you have, what type of property you want to own, and where you live.
If all these factors lie in favour of owning a home, then go ahead and purchase! You’ll enjoy all the advantages of having your house paid off and living free from rental payments.
On the other hand, if owning costs too much money at present, the best thing to do might be to look into rentals. This way, you can experience the benefits of both types of housing while paying less than if you were starting out with no asset base.
Check your credit score
One of the biggest factors that determine how much “real estate” you have is your credit rating or credit score. Many lenders will not agree to give you a mortgage unless you are able to prove that you have enough money to pay back the loan, so your credit rating comes into play.
Most people don’t realize it, but you can get a lot of information about your credit from different sources. For example, banks and other lending institutions ask another company to check your credit report for them. This company may even offer you a deal if they find things that need corrected.
You should always check your own credit reports from all three major national credit reporting agencies (Discover, Equifax, Experian) as well as credit card companies like Visa, Mastercard, and American Express. Don’t just look at one either – make sure that you look at each one!
Many times people only focus on their most recent credit report when looking to improve their credit scores, which is fine until you run out of time before a big purchase. It’s important to take a look at all of your credit reports regularly to ensure that everything is correct and up-to-date.
Consider the tax implications
As mentioned earlier, how much real estate you have depends on what kind of property you own. If it’s your primary residence or if it’s used for business purposes, then you may be able to exclude certain costs from your income.
But even if it’s not, there are still ways to reduce your overall taxable income. For example, you can allocate part of the cost towards savings instead of entertainment or education expenses. Or you can use the home as a rental where you charge monthly rent that covers your mortgage, utilities and other recurring bills.
Overall, however, owning a house is an excellent way to boost your financial position. A house gives you more space to store your possessions and raises your self-confidence by showing that you could afford a place to live. It also gives you some protection in case something goes wrong at work — you can always stay here until you find new accommodation.
