'Buying NZ Property – Download the free sample readings!

NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95.


Tuesday, September 21, 2010

Cost of living in NZ - what is expensive?

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The NZ Herald did a story recently on the cost of living in NZ after complaints from foreigners tourists. Top 5 on their list were:
1. Books from stores
2. Fish from retail chains
3. Wine from restaurants
4. Dental services
5. Mobile phone charges

They did however fail to pick up on two items which I think are expensive:
6. Energy costs. Gas and electricity might be competitive internationally, but consider that NZ'ers paid much less for publicly owned power, and they now pay $1/day for electricity & gas connection - that is for each connection. NZ retail gas prices have the highest mark-up over industrial prices in the world. Electricity is almost produced for free, and with 75% hydro generating capacity, and those plants built decades ago, there is no reason why profit margins couldn't be slimmer...if there was real competition. No one enters the market because there are no low-cost hydro sites anymore. Basically, privatisation in NZ was a hidden form of tax. The government locked us into a 'high-priced' cost structure to bring forward tax revenues. An utter scam.
7. Petrol strikes me as expensive too. You pay $1.76/litre. This is a 30% premium compared to Australia, and represents higher tax (56c/litre), a wholesale regulated price, and thus a lack of competition.
8. Land rates are very expensive. There is a lack of skills at local council level, so you see councillors agreeing to buy struggling private sector assets like power companies, as they struggle to keep jobs. This is however only true for rural areas. It is typical to pay $1300-1600 per annum for local govt rates in NZ, plus a further $100-200 for regional government rates. This does include various welfare services, which means NZ departs from the more typical 'user pays' regime for rates. Often those rates exclude garbage collection.
9. Building materials from your local hardware. Hardwares have a cozy relationship with builders and other tradespersons, so any bulk discount of up to 30-50% is passed onto the tradesperson rather than the customer. The implication is that the tradesperson gets the benefit, and this helps them finance a 3-day working week, or holidays in Tuscany. Just joking. None of them would know where that is. They buy jet boats and other toys. It is one of the rip-offs in NZ.
10. Bank fees in NZ were not as bad as Australia, until the Australian banks faced law suits. They will charge a $25-35 fee for a overdrawn account. Such punitive charges are not typical for private companies; but then banks have always functioned more like governments.

Reflecting on what is cheap - nothing much comes to mind except:
1. Cars - bought from a local auction - these cars are often Japanese imports
2. Buses are reasonably priced.
3. Rental cars are cheap - understandably given that cars are cheap.
4. Currency is cheap. The NZD is just 0.73 USD or 0.76 AUD, so if you are living on offshore income it remains the place to spend. This will not always be the case.

Food prices are reasonable. They are generally 15-20% more expensive than Australia, though the currency is 25-30% weaker, so they are not too different. Mind you, given that Australian average incomes are 30% higher, you might expect a greater concession.


'Buying NZ Property – Download the free sample readings!

NZ presents some of the most alluring property in the Western World; particularly given the greater easy of residency, the low cost of property, and the liveability of the country. In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

New Zealand Property Report 2010 - Download the table of contents or buy this 180-page report at our online store for just $US19.95.


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