My Sg property got enbloc and I re-invested into a NZ townhouse

Looking to re-invest his enbloc windfall back into the property market, Mark considered his options

New Launch? Resale? Industrial? Overseas?

Mark was working in the hedge fund industry and throughout his career, he had invested in 3 properties (2 residential and one commercial) here in Singapore during those years before the major cooling measures came. He was fortunate to receive a windfall from an enbloc sale for one of his residential properties. With the money that came back, he was looking for the most ideal way to re-invest the money to fund part of his upcoming retirement.

Mark started to look at various property options in Singapore, visiting new launch showrooms, and industrial units and even went to view a couple of resale residential. He quickly realized that the market was becoming saturated, and the prices were too high for the properties he was interested in. At his life stage, he is no longer keen in taking a mortgage and simply wanted to pay off the next property in full cash and enjoy the monthly passive rental income.

When we met up for a chat, this is what Mark told me:

"If I had re-entered the Singapore market and bought another property, I would incur very substantial stamp duties, the bulk of it from ABSD, and that eats into my retirement funds. Moreover, it doesn't make financial sense from an ROI perspective to pay more than 20% of the property value into a sunken tax cost. The higher prices in Singapore also deterred me as that would mean there will be little cash left over after paying for the property in full plus other buying expenses. I was hoping to keep a portion of the enbloc sale proceeds as cash liquidity to fund my travels during retirement."

They enjoyed traveling on road trips in the south island of New Zealand

With that, Mark began to look further afield, and his attention turned towards New Zealand, where the property market was relatively stable and offered good opportunities for strong rental income and capital growth. Mark loved to travel, and he had always been particularly fond of New Zealand. He had studied in Australia during his younger days and had traveled to New Zealand for holidays, where he met his current Singaporean wife who was studying there at the time. They both love New Zealand and what it has to offer, and the idea of owning a property there started to look like a real possibility.

New Zealand or Australia?

Since he had spent some time in Australia during his University days, Mark explored this option as well and was contemplating between Australia and New Zealand. Through the sessions that we had, he quickly found out that the tax structure in New Zealand is more friendly and appealing, though as Singaporean purchasers, they are not liable to any buyer stamp duties or additional foreign surcharges/duties. He was surprised to find out that to buy an Australia property as a Singaporean, stamp duties expenses can be quite expensive too.

Unlike Australia, NZ also has no seller restrictions, should he decide to want to sell at some point in future he could sell to anyone who is eligible to purchase a NZ property, such as a fellow Singaporean. Most importantly, he preferred the environment and lifestyle that New Zealand had to offer. Mark was also hoping to double his investment property as a vacation home, a place he could bring his wife and only daughter to unwind, relax and build beautiful memories together. However, he was unsure how that could be done if he were to rent out the property to a long term tenant for passive income.

Christchurch city was an ideal fit to where Mark was looking for

Together, we started to look for suitable property options in the main cities of New Zealand, and after conducting extensive research and due diligence, we identified a beautiful townhouse in Christchurch that he believed would be the perfect investment opportunity.

The city was experiencing fast population growth, and as prices were starting to rise, it was the perfect spot for Mark and his family. They loved the South Island, and they planned to use it as a base whenever they traveled there. In addition, Christchurch is a huge magnet city for both international & domestic tourism. This way, they had the option to use the property for short-term accommodation (think Airbnb but more) to generate consistent passive income and also use it for their use during their occasional travels there.

Mark moved forward with the purchase and was thrilled with the buying experience in New Zealand. With the proper guidance, he found the property-buying process to be straightforward and easy to navigate. In the mid of it, he was able to open a NZ bank account remotely with some help (without having to travel there), to facilitate receiving his rental income and paying off property-related expenses.

All things worked out well

Fast forward to today, Mark is very happy about the decision to take the plunge to invest in the New Zealand market and extremely grateful to have us partnered with him on the journey. He said:

"Not only have we made huge savings from not having to pay any stamp duties when buying a property in New Zealand, the smaller price quantum for a 2 bedder townhouse here has also made it more plateable. After paying for the NZ property, I still have a decent amount of funds leftover from the enbloc sale. I am very happy with the returns, the property value has already gone up by 12% by the time we TOP, and my airbnb income is giving me a net yield of close to 7%. No complains at all. It was a wonderful time and experience when we spend 2 weeks in the property during our recent holiday there. Our family now looks forward to making the trip more regular as that has now become our alternative residence in this part of the world."

Buying an investment property have not just helped Mark generate passive income and valuation gains, it has also become a part of their travel memories whenever they took the time off to travel to this beautiful and peaceful country.

Should I Invest abroad, stay put or wait?

If you are reading this, you are probably wondering what your next best steps in your investment journey could be.

Perhaps you are sitting on sizeable cash resources and wondering what your next investment would be? Will New Zealand market be a right fit for you and your family? Is this a good time to buy an overseas property, or should you wait and see?

Well, everyone’s situation is different. There is no one size fits all advice. What has worked for someone, may not necessarily work for you.

At Brickzwealth New Zealand, our aim is to bring clarity to your investment decisions with extensive on the ground experience for the overseas market.

Whether you are a first time property investor or a seasoned buyer with a portfolio, we are here to provide an honest and objective view to your investment journey.

We can help you by:

1) Providing Strategic property advice that best fit the outcome you desire
2) Identify & spot investment opportunities that align with your goals

Kick-start a conversation with us today. Invest differently. Inspire your future.

Ryan Quah
Founder
Brickzwealth New Zealand