So You Think the NZ Property Market is Out of Reach?
If you’re fed up with not being able to get your foot in the property market in New Zealand, you might just change your mind after listening to The Property Academy’s episode Singapore vs New Zealand.
If you thought New Zealand house prices are outrageous, think again. Image: Creative Commons
If you’ve ever searched AirBnB properties in Singapore, you’ll quickly discover that it’s not cheap.
In fact, you’ll be paying upwards of NZD300 per night for a one bedroom apartment. Compare that with a centrally located apartment in Auckland, and you’re instantly getting more bang for your buck with an additional bedroom, and possibly, even a pool.
High-rise apartment living might not be for everyone, but in Singapore towering concrete blocks are a means to house its 5.64 million people on an area of land only slightly bigger than Christchurch.
Packing people into towers might solve the problem, but the huge demand also creates other problems, including high entry barriers according to podcast hosts Andrew Nicol and Ed McKnight.
Nicol is an investor and the Managing Partner of Opes Partners, and Mcknight is an economist.
“There is no quarter acre dream in Singapore, “ says Nicol.
“Stamp duty over in Singapore is 2.64 percent. So if you’re buying a property it’s a million dollars, then you’re going to pay the government $24,600 dollars just to buy the property.”
Those interested in investing are likely to think again, that is, after they’re done picking their jaw up off the ground because that requires having to pay an even higher rate for stamp duty on a second property.
“You have to be really rich even to fund the stamp duty over there,” says Nicol who adds that investors will be charged another 17 percent for a second property in addition to the 2.64 percent already paid for the first.
Nicol says the Singaporean government builds a lot of apartments in Singapore, as well as owning 90 percent of the land, with four in five people living in housing and development board properties which are subsidised by the government. These apartments are means tested, with those earning less than around 200 thousand dollars a year eligible to purchase a home.
Find out more in the podcast episode to find out what kind of cash deposit you’ll be expected to pay if you want to purchase your first home in Singapore; what you’ll pay in the private market if you want to live in a stand-alone home, and the downsides of renting in Singapore, which will make the New Zealand property market look way more accessible than you might think.
Also recommended listening ‘Don’t save for your retirement … do this instead.’
Property Academy is an accessible and lively daily podcast that gives you all the information you need to know about the ins and outs of the property market, from buying and selling through to putting your property on the rental market and more.
