'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.


Thursday, February 24, 2011

Redefining the way New Zealanders think

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John Key might be a bit "queasy" but at least he has some sound thinkers on his advisory committee, with plans to radically overhaul welfare. The challenge for him is to incentivise welfare, such that people have a vested interest in working. The problem has always been:
1. The ease with which people can pretend to be working in order to get the payment they want.
2. The higher cost of providing the intervention needed to ensure they are looking for work, or are indeed prepared to perform it. i.e. Adquately trained.
3. The inability of governments to provide 'productive work' and complaints when they would have to displace 'real' jobs undertaken by people employed under standard arrangements.

The Australian scheme suffered because people would just do their minimal 2 job interviews a day, not really caring if they got the job or not. The other problem is ensuring that there is jobs at the end of the training or welfare 'conditionality' clause, which is what really provides the incentive to work. Not tried, is the prospect of engaging with these unemployed...selling the idea that working is actually good for them. Too many are disillusioned, and too many bosses have a short fuse for disillusioned workers with an attitude.
The demand side is the most difficult side to address. The problem is that NZ is at the end of the world. It is difficult to attract investment here. NZ has to find something the rest of the world wants. I have several suggestions:
1. Drop the minimum wage - you have to earn a wage - an attempt to short up wages only creates unemployment
2. Wage differentiation between a 'recession wage' and bonuses retained by employer trust fund for bad times, to help the country build savings. I actually don't like the idea of government intervention in people's income, but in the context of current problems, people need to be encouraged to support themselves. The NZ economy is not doing that, so people need to be encouraged to save. Better if people are individually incentivised, so they take responsibility. i.e. They are required to save their pension until they have a surplus above minimum, thereafter they spend their money as they will.
3. Immigration - I am not a fan of governments using immigration to stimulate economic activity, but NZ needs growth, so siphoning off some of the better-skilled Asians is probably a good idea, at least until the nation's population reaches 8-10mil. i.e. Double current numbers. We all love contemporary NZ as a place to visit...what about escalating it to a place we want to live. Of course greater integration with Australia effectively will help, so the required number could be considerably smaller.
4. Oil discovery - The NZ government ought to be offering subsidises for NZ oil explorers to go out and find oil in its vast offshore basins.
5. Social reconciliation - The problem in democracy is that there is no effective reconciliation of interests. People are able to delude themselves, to retain a self-righteous vested interest group and lobby govt. No respect for facts. Its all about influence. There are people like the animal rights groups who need to be challenged. Parliament needs to be opened up and accountable to meritocrats in the community. At the moment, parliamentarians are as accountable as welfare recipients. I would argue they are honorised welfare recipients at the moment, except they receive it as extortion of taxpayers rather than as a passive recipient of 'entitlements'.
6. Redefine Christchurch as a 'modern city' rather than attempting to 'prop up' its stilted old buildings, only to see them fall over with the next earthquake. Use modern design to create a futuristic city, and at the same time build innovative products that can be exported around the world. We no longer need big homes if we are living in public spaces. Find new economic ways of living, commuting and develop those schemes. Make eco-living an affordable and sensible concept so NZ can absorb 10mil people, and gain the respect of the world. Do that for Christchurch and people will want to live there, irrespective of the earthquake. I would allow Japanese companies who have already designed such schemes to come in and develop a 'mini-Japan' for Japanese retirees. This could be the basis of a free trade agreement with the Japanese, giving NZ'ers the opportunity to live and work in Japan.

There are too many NZ'ers living in a delusional world of government support, and these people are sanctioned by taxpayers who stand too readily to indulge their every indulgence and hard luck story. The fact that people were hurt by the earthquake is a testament to their unpreparedness for life. Those better NZ'ers need to require more of the 'other half' lest this country stays a nation of parasites. I know a number of aspirational New Zealanders overseas and they convey the psyche of parasites, manipulators and con men. Its the welfare mentality permeating this nation. A Christian-socialistic-collectivist culture that needs to be eliminated. A nation of perpetrators and victims, but always with a delusional smile. They can endlessly drop their expectations or standards, but at the end of the day...someone is going to pay. The brain drain is the inevitable result of the moral discourse in this country. Is John Key brave enough to confront it. On two levels, one is inclined to think he is:
1. He came out critical of those on welfare....I hope to does retain a level of engagement with welfare recipients....not a detached, self-righteousness. They do have legitimate issues, i.e. There are few jobs.
2. He has embraced the need for welfare reform.

Tuesday, February 22, 2011

Photos of Christchurch at its best and worst

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Interested in seeing some photos of the Christchurch historic buildings before and after; take a look at these photos. It must be acknowledged that these buildings appear to be only superficially damaged. The problem is the structural integrity might be compromised. It was a very shallow earthquake, only 10km from the city centre. It could not have been much worse because the earthquake occurred during the day, so there is probably 300-odd people dead. It would have been worse perhaps if it was not lunchtime. If it was nighttime, maybe only 30 people would have been killed. It was very unlikely to have a direct hit on the city centre like this. It is unlikely to get any worse....unless Wellington is next. That would be truly dire....though I would not miss the destruction of the NZ parliamentary building...preferably when it is sitting. Sadly, NZ has not been been having much luck lately.
Anyone retaining some sense of loyalty to their political masters ought to reflect on:
1. Their lack of accountability
2. Their capacity to extort wealth from people
3. Their lack of principles
4. Their lack of honesty

I must say, I am far more impressed by leaders in local government. The mayor of Christchurch does a far better job. Might that be because local government leaders are less able to side-step issues; or maybe its because people are not forced to 'choose', so each vote becomes more real. Or maybe its because their taxing powers are much more restricted. In any respect, its not a desirable system....and a spin off from the main game. Want a conception for a better NZ - consider this blog.

NZ needs new centres of growth

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Following the earthquake, in an interview with John Campbell, Mark Quigley, GNS spokesperson, made a very public and political solicitation for funds for research. He said this is 'fundamental science', actually it is applied science, and I'm not even sure it would have helped. The reality is that the GNS might never have an accurate model for the sub-surface. I suspect for it to develop an accurate model, it would need to drill a great number of holes several kilometres into the earth to place sensors in the ground to measure movement at different places. This does not seem feasible - principally for the fact that the 'active' geological terrain in question might comprise a great many slivers of crust with a succession of faults absorbing or releasing the stresses, so picking when and where the stresses are going to be released does not strike me as easy science.

Although it may well be sensible to increase the budget for GNS, I actually think the government needs to do some other things, including adoption of the following policies:
1. Ensure all new construction in Christchurch is earthquake-resistant. I have no idea whether the existing standards are adequate. Probably they are, and if not, then the assistance of the Japanese will probably help.
2. Adopt a 'slow-growth' model for Christchurch
3. Adopt measures to diversify NZ's population away from Christchurch by moving government jobs. The reason for this is that Christchurch might well be passing through a 300 year period of 'geological activism'. You do not want your 2nd largest, fastest growth city exposed to such destructive potential. Decentralising government jobs is the best way to create new cities. Oh course there is too much investment in Christchurch to abandon it, but this ought to be a long term strategy.
4. Develop new cities around existing infrastructure in Invercargill and somewhere like Motoeku (near Nelson). Of course port facilities will be critical to such a city. The South of the South Island already needs a new airport to handle tourism I believe. Queenstown is 6 hours from Christchurch, and its a hub for international tourism. There is a need for a larger regional international airport to service Dunedin, Invercargill, Queenstown and Wanaka. This is a good way of kickstarting such decentralisation.

NZ needs to think about whether it should rebuild Christchurch or scale back. Of course, NZ is not the only country to have earthquakes. San Francisco is built on the San Andreas Fault. Japan is subject to faulting, etc.
The difference is that Japan is pretty unstable regardless; and Tokyo was already well constructed, since it experienced a bad earthquake - the Great Kanto Earthquake - many years ago (1923). The difference is that Christchurch has a choice. There are areas in NZ which are a lot more stable than others, and diversification makes sense. Its not a divestment, but a shift in priorities and focus. The same can be said of Wellington. But that is a 'bureaucrat city', so its prone to gentrify anyway. Governments are naturally very good at killing things.

Christchurch in crisis - 2nd earthquake

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Christchurch is currently the scene of a crisis. The GNS are trying to forcecast the next earthquakes and where. I would suggest that is optimistic. Geological processes on Earth have been acting for billions of years. Modern Man has been occupying this planet and recording these events for just 3000 years. Even then the quality of the seismic record is just 100 years old. They are forecasting in the dark. NZ has only been settled by Europeans for 200 years.
NZ's South Island lies on a strike-slip fault when extends right along the island. There will be ongoing releases of stress along that structure, which is not a single fault, but a system of parallel and sub-parallel structures, each with their own stress characteristics.
Earthquakes are of course brittle (shallow) or semi-ductile (deeper) releases of those cumulative stresses. The most exposed or vulnerable areas are those areas on deep sedimentary piles, because they will oscillate when the earthquake hits. Clearly a major stress release carries the prospect of ancillary stress, or may even facilitate ongoing primary stress release. There is no way of knowing given that the stresses would need to be measured under the sedimentary pile.

Many people are disillusioned with the uncertainty of living in Christchurch. The future of the city is in jeopardy. Life in NZ is already difficult with the recession and lack of business investment. It does not help that the only investment is replacing the capital investment destroyed. Other parts of the country will also feel the implications. The bad news is:
1. The loss of business as a result of the clean up and restoration of services
2. Loss of tourism as the prospect of more earthquakes remains
3. Loss of students who decide not to continue their education in NZ, and instead go to Australia, i.e. 23 Japanese students are currently still trapped in their school (I believe??)
4. Many of Christchurch's residents will leave the city. I suspect many of them will go to Australia for higher earnings, and to escape the threat. Australia seldom experiences earthquakes. Its a very large, stable continental craton. Having said that the Newcastle earthquake 15 years ago did a lot of damage. The threats there are around Camden (NSW) and Kalgoorlie (WA). So a small prospect of threat for such a large country, and the threat is subdued. NZ'ers leaving will have flow-on effects for the country. The destruction of come of Christchurch's oldest historic buildings is very sad.

The only good news is the hit to the NZD. NZ exports 95% of its commodity production, so this spells stronger capital inflows for the city. There has been thousands of after-shocks since the initial earthquake in Sept 2010. This one is not as strong as the last, but it struck the centre of the city. It has destabilised a lot of buildings.

The bad news is that the geological stresses released along the fault zone will create new stresses along the fault zone. The good news is that there are no other large cities on the Canterbury Plain....that is good news. You might not extent more bad news. I think this is as bad as it will get. After tremours will likely be in different areas, i.e. in the suburbs. The problem is the weakening of already weakened structures. So there will need to be a lot of demolition.

The other great risk for NZ is the threat of an earthquake in Wellington, which is far along the same fault system. Wellington is not as vulnerable though because its sedimentary pile is very shallow; or non-existent, since many people are living on bedrock (i.e. hill sides). The greater threat is earth slips in the case of Wellington, whereas in Christchurch it was the tremours and liquefaction of the unconsolidated, saturated sediments near the surface.

Sunday, February 20, 2011

NZ - a nation of rorters?

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There are few countries in the world where one feels like one is in a free society. I have lived in a number of countries, and among them I would have to say that in terms of 'freedom from some form of extortion', I probably most felt extorted in New Zealand and the Philippines. NZ is probably worse, but then I feel richer in the Philippines because things are generally cheaper. In Australia or Japan, I did not feel so much of a problem, at least not at a commercial level.

I have been living in a short term rental lease in Queenstown, NZ, and I must say that the property managers in this place are abysmal for the following reasons:
1. Their contract was wrong from day one - they could not even calculate the right some. I can't remember if it was in our favour or theirs.
2. The property condition report was very adverse to us - in as much as they had not picked up a lot of the property damage. This is a potential rort. I complained about this. The problem is that when the agent 'misses' so many items, you are destined to miss some as well.
3. The property manager did not provide me with a copy of the property report. This is strange. I have never leased in NZ before, but it strikes me as strange that the tenant does not get a copy of the report. I asked for acknowledgement that they have received my copy. It was a struggle to get even that.
4. I was required to clean the apartment when I left the property. This might have been appropriate if I had in fact been in there more than 3 months, and the carpet needed cleaning. This strikes me as another rort. What I will do is that when I leave, I will require that they produce evidence that the carpets had been cleaned prior to my entering the premises, because I remember otherwise.

Australia has a rather good regulatory system for managing the relationship between tenants and landlords. In fairness to landlords, they are probably not making much money. At least not the owners of apartments like these. You are buying a depreciating asset, you have high property management fees. The property manager can be viewed standing around talking to people. Property managers are making easy money probably, when the asset owners get a raw deal. It is of course the owners of land who get the sweet deal.

I don't like living in a police state. Neither do I like living in a country where you are inclined to feel everyone is our to squeeze you for a buck. Nor do I like living in a society where you accept the requirement to pay tax, you live in fear of the system, but you deceive everyone around you by rorting the system. i.e. You set up a business, you rort the system with all these false or dubious business expenses, in order to keep your taxes down. People with a respect for reality, or honest people are penalised. Pretty soon there are no honest people left.
Welcome to the real world. Its not so pleasant. Everyone is a con, but only because they have to be in order to survive. No one questions the system because no one can change the system. You suck it up, then one day there is riots. We are witnessing them today in the Middle East. Its like a domino effect. Repressed individuals seemingly become incensed overnight and protest. We saw the same in the 1990s with the Rodney King riots in Los Angeles.
One day consumers, taxpayers, maybe everyone is going to say they have had enough. I just hope that they don't turn to government for solutions, because they are middlemen; they are the problem.
If you are thinking my contempt for the practice of a Queenstown property manager is enough. I am accustomed to being rorted. I have dealt with the building trades. Same in Australia mind you. The building trade in Japan I believe is pretty clean...at least in the cities. I think when you are dealing with businesses reliant on their reputation, you get better service. There will come a time when people will go online looking for services, and for people with a good reputation. We are not there yet, but it will come. Accreditation. People will start to care about their reputation, just as they did in the old days. I love the internet. It will give me the freedom I ultimately deserve.

Hone Harawira being smeared - NZ politics

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This is going to be a protracted election year in NZ. Already we are witnessing the smear from elected representatives....is that what they are?
According to the NZ Herald, there is evidence suggesting that the rogue Maori Party MP Hone Harawira sought a ministerial position when it was negotiating a coalition with National Party. The implication is that Hone Harawira is disingenuous because he is now against the coalition. The implication is that because Hone Harawira did not get a ministerial position, he is now doing a dummy spit.
Of course this is the implication the Maori Party want you to draw, and its the one the National Party also want you to draw because they do not want you to vote for him in the next election, and to diminish the position of the Maori Party, or upset their cozy coalition.
The reality is that this is just one possibility. Maybe Hone Harawira did do a 'dummy spit', and resented not being given a ministerial position. The other possibility however not countenanced by this MPs all too willing to discount him, is that the Maori Party MPs have alienated themselves from their electorate by forming a coalition with a party which represents values remote from its own. The second plausible reason that Hone Harawira has changed his mind about the coalition is because:
1. He expected the coalition to achieve real concessions from the National Party
2. He actions of the party since the coalition was formed
3. The practical consequences of forming the coalition

I don't like the politics of the Maori Party any more than I like Hone Harawira. I think they are all corrupted by our system of government. Democracy, if you read my political blog is merely a process for legitimatising collectivism or tyranny. It is not a system of justice, as no system which does not respect objectivity can be. The political discourse I am highlighting here is just a swob from the wound caused by democracy. It is truly a flawed system, and these political power plays and extortive tactics are democracy, and are not merely a side-show.
So I say, don't vote for any of them. Vote for the most unlikely of candidates - an unaffiliated libertarian. Not because you embrace their politics or philosophy, but because they embrace small government, which means they want to diminish the side-show. That is the least you could do. The most that you could do is to get off your butt and protest the fact that democracy is a repudiation of economic rights, which means you have no rights at all. Political rights without economic rights is a myth. It is not 'No taxation without representation', its 'Representation is a myth, taxation is slavery'.
Don't be lured into these false dichotomies, as if it was one or the other. You don't have to mortgage your personal liberty to attain freedom. You just have to recognise your sovereign right to be free from the coercion of others. i.e. The problem today is that coercion is practical. It is practical because the majority sanction it. You would not allow others to abuse your children; acknowledge that you are allowing your government to abuse you, but failing to acknowledging the abuse - unconditional taxation/expropriation. That is tyranny - you have no recourse. Don't pretend for a moment that a vote every 3-4 years makes a difference when the vote offers no political point of differentiation, when the two parties are the same, and there are only two parties. Its an illusion; all smoke and mirrors. You have been had.

Monday, February 14, 2011

Australian PM delivers a cliche

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Julia Gilliard has turned a commonplace activity like generosity and turned it into a cliche. It was always an Australian beat-up, this notion of 'mateship', but she wants to labour the point because we have to be close for economic reasons. Sadly these people waste our time, and they are only obstacles to the real 'business' of creating wealth. Consider for instance the fact that the Australian Liberal and Labor governments alike have for the last 20 years obstructed NZ apple exports to Australia, and concocted a scientific reason to lock out NZ apples which taste far better than the Australian apple....by miles.
The trade relationship with NZ is more important to NZ than it is to Australia...if only because NZ'ers have no money, no jobs, and a competitive advantage because their currency is so low.

Selling off NZ farm assets

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There are so many gross generalisations in this article supportive of privatising NZ assets and asset sales to foreigners.

Even if privatisation and asset sales are desirable, it does not mean NZ ought to be blaze about the process or results, and nor does it mean that market regulation cannot achieve a better outcome if properly implemented. NZ is not asset poor, it is income poor. The state of the Crafar balance sheet does not reflect the net or potential value of NZ generally. If the country can achieve population growth or global growth, there is really no problem if the govt does not artificially stimulate a housing bubble. Just because Telecom management has improved does not mean the process could not have been managed better.

There is the generalisation that foreigners bring expertise. That is not a given. Often its silly ‘bubble entrepreneurs’ buying in, who only bring money. They overpay for assets, they often have no farming expertise, and they often go broke because they are speculators. Is that a good thing? In the short term, it can mean high prices, but it might result in those farms being sold off to property developers.

In the 1980s, Telecom was government-owned, not privately owned, so that is striking at a straw man. It would make more sense to compare an Australian privatised concern with one which is now Singaporean. An example fails me.

Foreigners are buying commodity based assets because there is a commodities boom. You are suggesting they sell these assets before the boom spreads to food. How good is your investment sense? You would have them retain paper money during inflation, or pay off loans? Tangible physical assets should be held in this period as money is debased.

It is not a lack of capital investment which is the cause of capital investment in NZ, its the small size of the market. This means that Vodafone and Telecom need not worry about competition because they know that no other player is going to compete with their extensive networks, so why do they need to ‘over-capitalise’ their networks. Its a strategic decision that has nothing to do with public or private, but collusion, whether public or private.

Australia and NZ - their economic relationship

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The visit of Australian PM Julia Gillard to NZ has sparked a media discussion about the relationship between the two countries. I would offer the following:

The differences between Australian and NZ are real for several reasons:
1. Australia has benefited from high business investment and strong demand for its mineral & energy exports. It can confidently integrate with the global market.
2. NZ remains isolated and suffering a ‘brain drain’, mostly to Australia. Its food exports are only just about to recover, but it otherwise is on the back foot.
NZ is in some respects like South Australia, a small isolated population of Australia detached from the rest. Until NZ discovers oil, or its currency depreciates to a value-proposition, it will remain isolated, just as South Australia did before it discovered minerals (i.e. Olympic Dam). Interestingly, this discovery was made because of a $25mil govt-sponsored geophysics program. Might I suggest the NZ govt sponsor geophysical surveys over the offshore regions of NZ, in order to ignite oil & gas exploration. Oil for NZ would make it the richest country in the world, like the United Arab Emirates. John Key could be a god if the investment pays off. It’s a justifiable investment.
The economic stagnation that has placed NZ on the back foot is not a new phenomenon; it has been the reality ever since commodity prices dropped in the 1960s, and the UK joined the EC in 1973. Ever since NZ terms of trade and currency have under-performed. People no longer wanted NZ wool or milk. The ascension of China and India will change that. Asian girls will want milk so they can be as voluptuous as their Western cousins. Yes, guys! That means more 'big tit-tees'. We have seen poorly implemented privatisation, and others just 'back peddling' which has created welfare rather than income generating opportunity. Worst still is that the country seems to be moving towards Australia. Australia is successful not because of its regulatory framework, but despite it. Australian leaders can take all the credit for the turn around in its terms of trade and investment, but the reality is that it has more to do with India's isolationism in the past, and China's repressive Cultural Revolution in the 1960-70s. Those policies have unleashed an avalanche of wage disparity needing a market.

Thursday, February 10, 2011

Foreclosures in NZ

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Foreclosed properties are being offered in NZ. For more information on these properties in Ruepehu, North Island, see the following article.

Friday, February 4, 2011

Racial prejudice in NZ

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NZ does have a problem with racial prejudice. This must rank as a significant problem for a country which is countenancing the benefits of foreign immigration and tourism. There are several problems:
1. Superficial contact by NZ citizens with foreigners
2. A significant disempowerment by New Zealanders
3. National stagnation and the associated poor government policy

NZ people don't really understand foreigners because they don't engage with them. They snub their noses at them, all the while preserving some public precept of 'political correctness'.

New Zealanders might well celebrate the democracy which gives them a pretense of empowerment or 'participation'. The reality is that democracy gives them no effective opportunity to engage on public policy, and if given the opportunity, a great many of them would lack the self-assuredness to do so anyway. Does that mean it should be denied them? No. Does it mean their opinions should carry some weight? No. It means democracy is a flawed concept. Nothing is right by 'virtue' of the majority believing it to be right. Facts are more important than perceptions, and it is merely protection of the facts by other members of society which protects people from realising so. It might be self-evident to people of science, or people held 'ultimately' accountable like doctors, engineers, and the like, but the reality is that our political system gives primacy to perceptions. So NZ's racists can preserve their values along with their anonymity.

NZ is the farm. It might have a high number of foreigners living here, but that is just the 'appearance' because most of them are born in 'compatible' countries like the UK, America, Australia, and the Pacific Islands.

Perhaps the best opportunity for dispelling racist beliefs is to allow people to comprehend the value of others. One of the problems getting work for foreigners is the prejudice in the community. It is very hard. A foreigner needs the validation of a Westerner in order to get recognition. It is easier where a NZ'er has lived overseas. It is easier in the cities and those areas with significant tourism or Asian communities. I was out for dinner last night, and the waitress did not even acknowledge my Asian guests. They are fluent English speakers...and yet there was perhaps an unwillingness to deal with them. They might not have noticed unless I pointed it out.

Racism is a form of ignorance to be sure...but we can say that about anything. More significantly it is a failure to think...a failure to judiciously gather evidence, make differentiations when necessary, and to recognise that whilst generalisation is part of the knowledge formation, so it understanding the context (i.e. Pertinent factors). The problem is these people are not thinking because they have been protected. NZ is a protected socialist state, and so long as it lives behind the coveted protection of farm exports and regulated property prices, it is not going to succeed.

It is always my way to blame government because in most cases the folly extends back to government policy, or the culture which is embedded in the same values which preserves our democratic tradition. Mindless democracy. Until people are challenged intellectually, this country is no going to prosper, and if we step outside moral relativism, the entire world will be held back in absolute terms.

The historical legacy needs to change or NZ will be left behind. You might think 'all well and good', but the reality is that NZ needs foreign population because of the brain drain of the 'more astute' New Zealanders to Australia...if not further afield. Australia steals NZ minds right out of university. NZ needs to change its model or its just going to drift backwards until the day it makes a huge oil discovery. You live in hope!


'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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Download Table of Contents here.