Buying a Home in New Zealand

My husband and I have just returned from New Zealand where we spent the month of February. During that time we thoroughly investigated the real estate market there.

House in New ZealandMuch to our surprise, we were not the only Americans interested in acquiring a home in New Zealand. As a matter of fact, we were bumping into fellow potential expats right and left who were seriously considering purchasing a home, some as second homes and some as primary residences, if they could acquire permanent resident status. The most sought-after areas for purchases were the seaport city of Auckland, which is very popular with sailing enthusiasts and Queenstown in the South Island, which is known for adventure sports and spectacular scenery.

Here are the important facts that you need to know before embarking on a search for a residence in New Zealand. The process differs greatly from the way residential real estate is marketed and sold in the U.S.:

  • New-Zealand-auction75-80% of the homes in New Zealand are sold at auction. These are not foreclosure auctions, but rather the normal way that prices are established and properties are sold. Some very high-end properties over $4m are sold “by negotiation” and never go to auction.
  • The process begins when the seller engages a marketing agent to sell their home. The entire process from beginning to end is a matter of weeks, if the property is appropriately priced.
  • The seller’s agent usually secures a stager to dress up the apartment and give it maximum visual appeal. The unit gets photographed and published online and in the weekend newspaper real estate inserts. The cost of the staging and advertising is borne by the seller.
  • The agent then holds a number of Open Houses for the public to attend – maximum of four, but more likely only two, one on the weekend and one early evening during the week. This takes place during a two week period.
  • The auction date is posted and is scheduled to take place a few weeks later. Numerous properties will be auctioned on the same occasion. All due diligence must be done by the prospective buyers prior to the auction because there will be no contingencies in the sale contracts. Furthermore, everything is sold on an all-cash basis, so any financing commitment, if desired, must be secured before the auction.
  • These auctions are usually held in a large conference room at the central office of a real estate firm on a weekday. They are attended by the interested buyers along with the agents representing them. There are two large TV screens showing a photograph of the property, a one sentence description and the auction lot number. Some buyers are only represented by their agents who are in touch with them by cell phone.
  • A professional auctioneer begins the auction, usually at a lower number than the upset price that the seller has said he would accept. The auctioneer tries to bid the price up to and beyond the acceptable number which the seller has indicated is the lowest price that he will accept. The purchasers are unaware of what the upset number is. There are often three or four prospective purchasers bidding against each other. Depending upon the interest in the property, approximately 80% of the properties at the auction, reach the upset price and many go considerably beyond it. After the gavel falls awarding the home to the highest bidder, the buyers and their agents retire to a small room to sign the sales documents and put down a 10% deposit, agreeing to the closing time which was set by the seller as a condition of the sale.
  • Those properties which don’t reach the minimum upset price trigger a brief, private negotiation between the highest bidder and the seller’s agent. If they cannot agree on a price acceptable to the seller, the property is pulled from the auction and will not be sold that day. It may be re-introduced at a subsequent auction with a lower upset price in the future.

This system, although foreign to us, seems to work quite efficiently in both New Zealand and Australia. The question for foreigners is, how to work it when you live on the opposite side of the globe and can’t fly in multiple times to inspect homes at Open Houses?

How to Purchase a NZ home when you don’t already live there

Our suggestion is to go to New Zealand and familiarize yourself with the areas where you might want to live. Then find a local agent who will represent you as a buyer’s representative. They will keep you advised of every appropriate listing which comes on the market in that area and send you the information and a video along with a full description of the property. If you have a really competent agent, you will be able to bid on the property without physically being in the country at the time of the auction. Granted, there is somewhat of a leap of faith involved, but the Kiwis are lovely, very honest people. If you find a competent and experienced agent, you will be in good hands.

Good News:

There are no restrictions on home purchases by foreign buyers, and you can spend up to six months a year in New Zealand without having permanent resident status.

The NZ Dollar is approximately 30 cheaper than the U.S. Dollar.

Stay tuned to this website for more information about purchasing a home in New Zealand and Australia.

The Ultimate Urban Traffic Jam

Manhattanites are familiar with traffic jams, which are exacerbated by some of our urban-congesting events: more than a dozen mid-town parades annually; the days the U.N. is in session; the NYC Marathon; Fashion Week; visiting dignitaries; and other traffic hindering events such as street fairs and the occasional protest. For the most part, Manhattan dwellers are good sports. We roll with the punches and our excellent, well-trained police department and mayor seem to have these events more or less under control.

NYC 5th Avenue. All traffic blocked off

Those of us who run a business and have to move around mid-town have however now been burdened with what appears to be a constant hindrance with no end in sight. Since our President-Elect Trump has made a unilateral decision to conduct most of his government business from his palazzo atop Trump Tower at Fifth Avenue between East 56th and East 57th Street, this major inconvenience to New Yorkers, the condominium owners who reside in Trump Tower, tourists and especially the merchants whose shops are inaccessible, is likely to continue for the duration of the Trump presidency.

NYC 5th Avenue near Trump TowerRather than conduct this business in Washington D.C., where office space was allocated for this purpose, President-Elect Trump has leased out several floors in Trump Tower, which the Trump Organization owns, to the U.S. government at taxpayers’ expense, in the most expensive office rent district in the country.

Even if you are not among the distressed New Yorkers trying to work your way around police blockades and the monstrous traffic jams created when Fifth Avenue and the adjacent side streets are closed to traffic, taxpayers around the country should be appalled at the cost of maintaining expensive office space in Trump Tower and the cost of our local police protecting Trump and his family at Trump Tower.

NYC 5th Avenue. All traffic blocked offNYC Mayor de Blasio has requested reimbursement of $35 million. This expense to the city covers a total of 53 days – the time between the election and the inauguration on January 20th.

So far, the Federal Government has only agreed to reimburse the city for $7 million. New Yorkers don’t want the difference on their tax bill. NEW YORKERS ARE SAD AND MAD!

NYC - Trump Tower

January 1, 2017 – The Opening of an Initial Segment of the Illusive Second Avenue Subway – Hooray!

On New Year’s Eve, December 31st, 2016, Governor Cuomo, Mayor de Blasio, and other city officials, will pop the champagne corks as they are given the very first ride on the Second Avenue Subway!

Approximately 100 years ago in 1910, discussions for the construction of the illusive Second Avenue Subway were begun. At the time, there were elevated subway lines on Second and Third Avenues. These were demolished in the 1940s and early 1950s, as real estate developers became hungry for new sites to develop high rise residences and were looking to gentrify these neighborhoods. By then, numerous plans for a Second Avenue subway had been created and abandoned because of various fiscal crises.

BY 2.0, https://commons.wikimedia.org/w/index.php?curid=33087314

By Metropolitan Transportation Authority of the State of New York – Second Avenue Subway: 72nd St.

Because construction stops and starts on the project occurred over the years, beginning in the 1970s, there are a number of “ghost stations” which were created but will never be put into use because of constantly changing routing of the planned subway.

CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=33087314

By Metropolitan Transportation Authority of the State of New York – Second Avenue Subway: 72nd St.

It has taken nearly a century, during the terms of 14 mayors, 12 governors and dozens of transit leaders to complete the first phase of the Second Avenue Subway tunnels and the stations now located at East 72nd Street, East 86th Street and East 96th Street and Second Avenue.

The inaugural opening of the completion of the FIRST PHASE of the Second Avenue Subway for the public will take place on January 1st 2017. This underground project which was begun in 2012 has cost $4.5 billion. So much for the feasibility of infrastructure projects in large cities.

CC0, https://commons.wikimedia.org/w/index.php?curid=10642840

By Jim Henderson

My Dealings with “The Donald”

A snapshot of the practices of Trump the Real Estate Developer

Having spent over 40 years selling high-end residential real estate in Manhattan, Donald Trump, the Republican candidate for President and I have had repeated business dealings together. I participated in focus advisory groups for his luxury residential developments and subsequently sold condominiums in his Manhattan condo buildings. So here’s a little insight about how he created his real estate empire in New York City. Please judge for yourself if this is the type of business judgment that you would desire in the person who might be elected to be the leader of the free world.

credit: https://www.flickr.com/photos/notionscapital/19535228309In 1981, Donald Trump built his first major building on the corner of East 56th Street and Fifth Avenue, appropriately named, TRUMP TOWER, by purchasing and demolishing the department store, Bonwit Teller, buying the air rights over Tiffany’s and creating what he labeled as a “public space” on Madison Avenue. When the candidate says that he has always had politicians in his pocket, he is probably correct – or at least he was correct when he put this unusual, rather convoluted real estate transaction together.

Who actually built the Trump Tower?

The demolition required to build Trump Tower was done by 200 undocumented Polish immigrants who were ostensibly paid $4-5 an hour, off the books. Rather a contradiction for a candidate who wants to deport all undocumented immigrants, who are “stealing American jobs”! In 1983, a lawsuit was commenced for unpaid labor union pension and medical obligations. The case dragged through the courts triggering appeal after appeal until it was finally settled for an undisclosed amount in 1999 – 16 year later.

Peeking under the hood to find out why these buildings were made with concrete

The respected journalist, David Cay Johnson, publicized the fact that the construction of Trump Tower was designed as a concrete structure rather than a steel structure which was state of art at the time. Furthermore, the concrete for this and other Trump developments was purchased, Johnson pointed out, from HRH Construction, owned by Anthony, “Fat Tony” Salerno, the head of the Genovese Crime Family and “Big Paul” Castellano, the head of the Gambino Crime family.

The mystery of Donald Trump’s floor numbering

Donald Trump’s other claim to fame was the art of misnumbering the floors in his buildings to his advantage. This sleight of hand began with Trump Tower whose elevator buttons have numbers indicating 68 floors, when the building actually has 10 fewer floors. Since Trump Tower has the atrium and commercial floors beneath the residential tower, he just started numbering the homes as beginning on the 30th floor, when they were in actuality on the 20th floor!

Is Trump the owner – or not?

The other “real estate surprise” is that most of the buildings that Trump originally built or developed are not actually owned by him. He sold his interest in the properties and allowed the buyer to license his name on the properties. Another clever illusion that he turned into a profit.

The question which one must ask oneself is, will all of this trickery go down in the world of international politics, where he claims that he will break treaties and contracts at will and “make America great again.”

I wonder if the 200 undocumented Polish workers will be part of the 17 million plus deportees.

Japan – April 2015

We spent a month traveling around Japan this past April and within a day of our arrival, a few things became very obvious:

  1. There are no fat people in Japan. Everyone looks healthy and well fed, but no one is obese.
  2. People are neatly and appropriately well-dressed.
  3. Employees take great pride in their jobs and there is high productivity and very low unemployment.
  4. EVERYTHING WORKS! The infrastructure is in perfect repair, so people use the underground and there are no traffic jams in Toyko.

Could it be that “American Exceptional-ism” could learn a few things worth copying from the Japanese?

Jazz Musicians at the Metropolitan Museum in NYC

The Metropolitan Museum Friday night cultural evenings included this one featuring different jazz groups on January 30th. Art and music is a fabulous combination and the acoustics and architecture make it a truly unique experience.

Restaurants in Portland

Portland is a food junkies heaven! Whether it’s Hot Lips Pizza delivered by an electric car, or Hawaiian food served in a former gas station, the variety and quality of the food here is fantastic. There is a whole block of food carts that rival anything in Bangkok.

The Oligarch Next Door

For the past two decades, foreigners have been purchasing homes in expensive new luxury condominiums in New York City driving prices to extraordinary levels, the most recent of which was the purchase of a $100 million dollar Penthouse in the prestigious One57 Condominium. In today’s market, international real estate buyers comprise upwards of 50% of these purchasers. The question has been repeated asked by native New Yorkers, where does all the money come from and who can afford to pay upwards of $7,000-8,000 per square foot and higher for these “homes”?

Columbus Circle New York CityThe answer is complex. First of all, most of these units are not really homes in the traditional sense. Instead, they are safety deposit boxes for the hidden wealth of people who have often usurped economic power, sometimes by questionable methods, often through political connections, in their native countries. Many of the apartments remain empty; some are furnished and used intermittently by various family members from time to time who are visiting NYC or attending colleges and universities here.

Why do these international real estate buyers choose the U.S.?

Most of the millions of dollars necessary to purchase these properties have been transferred to off-shore bank accounts, often without having been taxed in any country. Since the profit gained in these off-shore bank accounts is less than optimal, many of these people choose to park their money in U.S. real estate in areas with established growth potential like Manhattan or Southern California. Because of the steady foreign demand for these properties, they are virtually recession-proof.

There is also the added advantage of being able to conceal the actual personal ownership of this real estate through LLCs (Limited Liability Corporations and Trusts), making them out of the reach of foreign governments trying to confiscate the U.S. assets of their citizens. Purchases of this type are perfectly legal in the United States and these sales are frequently negotiated by agents such as myself. The LLC is the entity formed for the sole purpose of owning this one property. It is managed by an off-shore bank in a tax free haven.

Dig deeper…

The New York Times has done a major year-long investigation to establish who the actual owners are of the real estate are with interesting but somewhat limited results. The front page series on this subject began on Sunday, February 9th and is running daily with interesting Inspector Clouseau-type discovered tidbits revealed each day. If you interested in the unabridged version as reported by the New York Times, click here.

Halloween in NYC

Halloween has grown in popularity. Once a British and American holiday, it has now become an event celebrated in Western Europe as well. Manhattanites love to decorate the outside of their homes for the occasion. Restaurants, likewise, add the Halloween element. Most leave this theme up until Thanksgiving. Here are some of the more interesting home displays.

Never enough space for the richest New Yorkers

The economy of France may not be booming, but it just cashed in on one of it’s best investments.

Spring flowers blooming at Park Avenue in ManhattanIn 1979, the government of France paid $600,000 ($1.9m in 2014 dollars) for an 18 room duplex at 740 Park Avenue on the 12th and 13th floors, a Rosario Candela designed pre-war, 18 room “mansion in the sky”. This year the French government decided that the present value of the apartment which they assumed to be around $50m was a little too large an investment to house their U.N Ambassador. They put it on the market in April 2014 for an asking price of $48m.

It went to a bidding war with multiple buyers and sold for $71.3m (a 3,500% profit!) to a resident in a continuous apartment on the 14th floor. The purchaser, Israel “Izzy” Englander founder of the Millennium hedge fund ostensibly purchased it as a pied-a-terre for his children and grandchildren when they were visiting.

Rumor has it that there’s a large line up of potential adoptees, should the Englanders decide that they would like to increase their offspring.