Greener pastures?

Apparently ‘buy-to-let’ is the new rage in New Zealand. My brother who lives in Auckland called to tell me that he was seriously considering buying a lot of properties and letting them out on rent.

“Prices are cheap now,” he said. “For 300,000 New Zealand dollars, you get a decent three or four bedroom house. That’s just £100,000 to you Brits. The rental income will pay off our mortgage and prices are rising so rapidly, you are assured of a good capital gain return in a few years.”

“Can UK residents buy in New Zealand?” I asked, immediately pricking up at the thought that those who missed the boat and could not become property millionaires in the UK, may still be able to catch up in New Zealand.

“Yes of course,” replied my brother. “I know many UK families who have bought dozens of buy-to-let properties here.”

But hold on – all is not paved with gold.

Interest rates in New Zealand are quite high – nearly 8%.

But house prices are still so low in New Zealand that a normal three-bed house for £300,000 in the UK can be exchanged for a farm with 20 acres of land, a large mansion and a few stables and barns (all for the same price).

“A lot of people just buy these farms here, plant grape vines, and export tonnes of grapes every year,” concluded my brother. “Easy money while you sit and chill.”

Who says the grass is not greener on the other side?