The
5 Best Ways:
To Live, Retire, or
Profit in New Zealand
by Rick Rule
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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 |
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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:
Escape Artist's
New Zealand Real Estate Page:
http://www.escapeartist.com/emnz/emnz.htm
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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.
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. |
