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There are only 3 groups of people allowed to buy property in New Zealand: Kiwis, Australians and Singaporeans.

All other foreign buyers have to apply for government permission if they want to buy a property. Singaporean nationals don’t have to do that.

This gives Singaporeans a unique opportunity, especially if you are locked out of the expensive private market in Singapore.

But, while investing in New Zealand’s property requires less paper work than for citizens from other countries, is it a good idea? And how do Singaporeans do it?

In this article you’ll learn the six key differences between the Singaporean and New Zealand housing markets, how to go about buying internationally, and why some people from Singapore are choosing to invest in NZ.

If you have any questions or thoughts, please leave them in the comments section below.

Why can Singaporeans buy in New Zealand?

Singapore and New Zealand, as two small island nations in the Asia Pacific, have shared a longstanding diplomatic relationship for the past 50-odd years.

Singapore is New Zealand’s 9th largest trading partner; it is a strong defence partner. The two countries also signed a free-trade agreement (the ANZSCEP) in 2000.

In 2018, the New Zealand government introduced a law banning foreign buyers from purchasing residential property.

But because of the free trade agreement Singaporean and Australian passport holders aren’t impacted by the ban.

More specifically, you can buy (or build) an investment property or home to live in, in New Zealand, without applying for consent if you, your partner or spouse, are:

  • A New Zealand citizen or hold a residence class visa and are “ordinarily resident” in NZ
  • An Australian or Singaporean citizen

You can also purchase properties if you are a Singaporean resident and live more than half the year in NZ.

What are the differences between the NZ property market and the Singaporean market?

Why would someone from Singapore invest in New Zealand rather than in their home country?

Even though Singapore and New Zealand are among the world’s most unaffordable property markets, according to the Demographia International Housing Affordability Report, there are six key differences between the two.

Together these make New Zealand a more attractive place to invest, compared to Singapore. Here are those six differences:

#1 – New Zealand doesn’t have Stamp Duty

Stamp duty is a type of property tax that many Kiwis aren’t familiar with … because it doesn’t exist in New Zealand. That’s even if you are a foreign buyer purchasing property in the country.

Singaporeans, on the other hand, have to pay heavy taxes every time they want to buy a property. Just how much depends on whether it’s your first, second or third property.

It also depends on the purchase price of your property.

But, for example, if you buy a $1 million property then you will need to pay the government $24,600 … just to buy the property.

That’s 2.46% of the purchase price.

And the stamp duty gets extremely high when purchasing properties as an investor.

If you purchase a second property in Singapore you then have to pay Additional Buyer Stamp Duty (ABSD). This is an additional tax and the stamp duty jumps to 17% of the purchase price. That’s in addition to the original stamp duty (19.46% on a $1 million property).

The stamp duty on your third property is 25% (27.64% on a $1 million property when including the original stamp duty).

So, if you were to buy three $1m properties (and you don’t own any today) you’ll have to pay: $24,600 on your first property + $194,600 + $274,600 = $493,800 just in stamp duty.

To just break even you’d need your properties to go up in value by 16.46% … just to account for the tax.

On top of that you’ve got to pay the government this money up front in cash. That means it is often expensive to get started as an investor in Singapore.

However, in New Zealand there is no stamp duty and no Additional Buyer Stamp Duty. You don’t have to pay any money to the government when you buy a house.

In addition, there is no stamp duty in NZ if you sell a house, whereas in Singapore there is another stamp duty if you choose to sell the property within 3 years.

So, the first benefit of investing in New Zealand is that it costs less money up front, and you don’t have to pay as much tax.

#2 – In New Zealand you have more control over your property

The property market in Singapore is split into 2 types:

  • Private (more elite, more expensive property owned by individuals)
  • Public (built by the government as a part of the Singapore Housing Development Board)

4 out of 5 Singaporeans fall into the public market category and 90% of all the land in Singapore is owned by the government.

This means the private market is very small, which is why it is also very expensive.

On top of this if you want to buy an investment property in Singapore you need to buy through the private market.

This is why it can sometimes cost 3x more if you want to buy an investment property in Singapore compared to investing in New Zealand.

#3 – You can buy property with a smaller deposit in New Zealand

If a Singaporean wants to invest in New Zealand they’ll generally need a 20-40% deposit.

That’s a 20-30% deposit if buying a New Build (depending on the bank), and 40% for an existing property.

But if you want to invest in Singapore you need to have a 55% deposit … in cash.

This provides another barrier for Singaporeans wanting to buy an investment property.

#4 – There is a much smaller rental market in Singapore

Singaporeans are often proud of their housing system.

According to Statistics Singapore, 89% of the population live in a house they own. This means only 11% of the population rents.

That means if you do buy an investment property in Singapore you may struggle to find a tenant because there aren’t as many of them.

Compare that to New Zealand, where around a third of households rent.

That means, as a percentage, renting is 3x more common in New Zealand compared to Singapore.

On top of this, when speaking to Singaporeans who are investing in New Zealand we understand that in Singapore property managers get paid up front at the start of a tenancy.

This means they aren’t as interested in regularly checking the property and giving good service to investors and tenants.

Whereas in New Zealand property managers are paid every fortnight, so have an incentive to continue giving good quality service.

#5 – In New Zealand, Singaporeans can buy a house or townhouse, not just an apartment

Singapore is known as a city state and has a land area of just 719 kilometres squared.

For context, it’s only about the size of central Auckland (New Zealand’s largest city). But there are 5.7 million people living in Singapore – more than the population of NZ.

Because there are a lot more people living in a much smaller land area, Singaporeans primarily live in high-rise apartments. Standalone homes and townhouses cost significantly more money.

But in New Zealand, because there is 366x more land, there is a wider variety of properties. Fewer people live in apartments … instead Kiwis live in standalone houses and townhouses.

This means Singaporeans are able to purchase a house or townhouse for significantly less than they could in Singapore.

#6 – Properties in Singapore are leasehold

Lastly, all apartments in Singapore come with a 99-year ground lease.

This means you don’t own the land beneath the building; it’s rented to you by the government for one year short of a century.

But what happens after this lease is up? The Singaporean government doesn’t currently appear to have an answer.

But in NZ most properties are “freehold” or “unit title”. This means that you own both the house and the land underneath it. You generally don’t have to pay a ground lease, and you don’t have to worry about what happens when your ground lease is up.

What properties should Singaporeans invest in?

Just like everyone else buying property in New Zealand, Singaporeans have the choice between investing in existing property or New Builds.

But, recently, new tax laws have meant that all investors purchasing existing properties will pay significantly more money to the government.

These changes are around how the tax is calculated. The largest change is that investors can no longer include their mortgage interest costs when calculating their taxable profit.

This means property investors purchasing existing properties will be taxed as if they don’t have a mortgage to pay … despite the fact that they still do.

However, New Builds have a 20-year exemption for these new tax rules, which means there is a much larger incentive for Singaporeans to choose a New Build investment, rather than purchasing an existing property.

On top of that, New Builds require a 20-30% deposit (depending on the bank), which is slightly lower than the 40% required for existing properties.

How do you invest in New Zealand as a Singaporean National?

Investing in New Zealand can be a great opportunity for a Singaporean national, who may find themselves locked out of their own property market.

For instance, it’s possible to buy a 4-bedroom standalone house in New Zealand for $900k, which would otherwise cost $4 million in Singapore.

Other Singaporean investors may like to diversify their portfolio, or invest in New Zealand property for personal reasons (e.g. for their children to live in).

Whatever the reason you choose to invest – because of the ocean between the two countries – it’s really important to use a trusted buyer’s agent that understands investment.

This is because, as a Singaporean looking to grow your wealth in New Zealand, it’s important to make that decision based on data and research.

Opes Partners (that’s us) is one of these companies, but there are other options too.

A specialised property investment company will:

  • a) Find you the property
  • b) Introduce you to mortgage brokers and accountants who set this up for you
  • c) Create a financial plan to grow your wealth, and property portfolio.
Opes Partners
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Andrew Nicol

Managing Director, 20+ Years' Experience Investing In Property, Author & Host

Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.

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