Moving to Australia from New Zealand?
Get all information you need to make a successful and stress-free move across the ditch.
If you have your heart set on a retirement home in a Australia, and need to send a sizable deposit before another buyer beats you to it, an online money transfer is a fast and secure way to make your down payment. Maybe you’ve negotiated a lucrative price on a property based on a short closing timeframe, or maybe you just don’t want to miss out on your dream home.
Whatever your motivation for buying a property in Australia, the financial and contractual processes don’t have to be complicated, time-consuming, or fraught with legal risk.
Here are five tips for expats (and soon-to-be expats) planning to move to Australia or expand their overseas property holdings.
Whether you are buying your property from a stranger, a lifelong friend, or even a family member, it’s important to enter an iAustralia real estate transaction with your eyes open, your mind clear, and a firm grip on your wallet.
If you were buying a property in your own city, or across the country, you would likely work with a competent real estate agent and spend a significant amount of time touring homes and doing your due diligence. Yet when it comes to a vacation property or retirement home, there are many emotions involved.
Depending on your origin and destination countries, your eligibility and ease of securing a mortgage in a foreign countrywill vary. You may have to make a significant down payment of nearly 30%. Developer or seller financing arrangementsmay help you save on interest. Be sure to budget for transfer fees or stamp dutyas part of your property purchase.
If you’re preparing to buy a property in Australia, ensure you do as much research as you would on a domestic property, if not more. You can find great resources on websites like RealEstate.com.auor Domain.
Many countries have new home warranty programs and regulations. If you’re looking at new homes abroad, be sure to do your research on local developers, and understand the implications of builder-responsible defects.
Further, you can find reputable tradespeople through regional contractor associations like the Australian Construction Industry Forum.
These groups can help you navigate the local renovation market, as well as the local rules of law related to home zoning, building standards, and renovations. Or before you start your journey.
If you buy vacant land or a previously occupied home, avoid entering a private property transaction without representation. Get professional purchase advice from a certified local real estate broker, agent or reputable developer. You can also ask real estate professionals in New Zealand for referrals to their counterparts in Australia.
You might live in your vacation home for a few months out of the year, the whole year around, or even use it purely as an income property via leases. Do your due diligence on your tax responsibilitiesrelative to capital gains, safe-harbor provisions, income tax and any reporting responsibilities your home country requires, and the nation where you buy a property.
Rules, laws, and regulations have been mentioned a few times in this blog, yet it can’t be overstated. Mitigating risk when you set up residence in a foreign country is well worth the investment in hiring a local attorney or solicitor.
They can help you get important documents translated (not to mention translate the legalese) and advise you on potential legal exposures in your property purchase agreement. If you already have legal representation in New Zealand, they might have a relationship with other firms in Australia.
You can contact the Australia Bar Associationfor additional guidance. When you’ve decided to acquire a vacation property in another country, or you’ve found the retirement home of your dreams overseas, your emotions play a central role in your thought processes. Take the time to research the links offered above. You’ll minimize your legal and financial risk and get more enjoyment from your investment.
When you are paying a significant amount of money for lease payments, maintenance fees or to purchase a home outright, transaction costs can be prohibitive. Many banks and foreign currency brokers charge high fees, bury hidden costs and offer less-than-desirable exchange rates. Before you go to your bank, check out the prices offered by amoney transfer service providerwhich monitors multiple currency sources.
Fee-free, exchange-transparent money transfersare available, and you owe it to yourself to get the best return on your money. When you are buying a home, making your money go as far as possible is critical. Whether you are making a one-time lump sum property payment or incremental mortgage payments, remittances in the local currency can help you realize significant savings.
If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!
The foreign exchange market is a global decentralised market also known as an over-the-counter market where bank dealers make the marketto determine the interbank exchange rate, i.e. the rate the banks use when trading with one another.
The interbank rate is the mid-point between the buy and sell rate for a currency on the open market and is the most accurate rate of exchange at any given time. You can easily check this at any time using the XE Currency Converter.
Unfortunately for most of us, this rate is reserved solely for banks and large financial institutions trading in large amounts of foreign currency. For retail or business banking customers looking to make smaller international money transfers, a margin (or spread) will be applied to the interbank rate to ensure a profit for the service making the transfer.
As a retail banking customer, this margin may be anywhere between ~4-5% of the interbank rate. The graph below illustrates the rate that a customer may expect to receive from the bank when converting their AUD or NZD to GBP.
Naturally, when sending money abroad, it’s in your best interests to ensure you keep as much of your money as possible by locking in a favourable rate of exchange.
The exchange rate you receive will be based on a number of factors, including:
However, one of the most sure-fire ways to ensure you are receiving a competitive rate is to look at using a money transfer specialist like XE who provides a much sharper rate of exchange than you would otherwise receive from the banks.
XE works closely with our broad network of referring partners to provide their clients with a competitive, secure money transfer solution. As such, when you choose XE Money Transfer via one of our partners, you will receive preferential rates of exchange that are more competitive than you would receive from other providers.
…It’s not just about the rate
At XE, we pride ourselves on delivering our clients value beyond a great rate, providing a much more comprehensive service than they could expect to receive from the banks.
Exchange rates fluctuate at any given minute and as such our expert team are on hand to be your eyes and ears on the market and advise on how to ensure you lock in the best rate possible. We also offer a range of products typically not made available to retail banking clients, including Market Orders and Forward Contracts, that will help you reduce your exposure to currency risk.
The Australian dollar tracked lower through the latter stages of February and early March as weaker economic growth and falling house process lead many to believe that the Reserve Bank of Australia will cut interest rates once or twice through the second half of 2019.
Given that the Reserve Bank of New Zealand is currently expected to keep NZ rates on hold for the time being, the Kiwi dollar has been outperforming its antipodean cousin for some time.
NZD now sits at its highest level vs the AUD since early 2017 and appears poised to once again have a crack at breaking parity with some of the major banks calling this to occur within the next couple of months.
BREXIT deal progress still remains up in the air with further parliamentary votes this week with the likely outcome being another NO vote for PM May’s package. The UK parliament to then proceed to another vote, deciding to leave the EU with a no deal, or vote to extend the Article 50 deadline – the latter expected to allow more time for a deal to be agreed.
The Kiwi dollar currently sits ~7% off post BREXIT lows whilst the Aussie dollar just ~1.50% higher.
If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!
2018 proved a challenging year for both the Aussie and Kiwi dollars as they both produced multi-year lows, AUDUSD retreating ~10% whilst NZDUSD faced calmer headwinds, falling ~6%.
It proved a solid year for the Kiwi dollar against its Aussie cousin, as the ongoing US x China trade rift had a more profound downside effect on the Aussie dollar, NZDAUD ending the year ~5% higher and poised for further gains in early 2019.
Back in early October, the Brexit news flow was glowingly positive – proclaiming that a deal was imminent. Five months on and Theresa May’s debacle continues to unfold with NZD and AUD sitting ~7% and ~3% higher from the October lows and braced to track higher should no deal be reached over the coming 6 weeks.
1. US-China trade talks | Markets are expecting progress this week, either a reduction, delay or removal of tariffs
2. BREXIT | The outlook is till very uncertain, odds growing of a second referendum or hard BREXIT.
3. The RBA | Have recently shifted to a neutral stance meaning that rate cuts could be occurring later 2019
4. The RBNZ | Confirmed last week that rates are on hold and cuts not on in play for the time being
5. NZDAUD | The Kiwi continues to march higher against its antipodean cousin with likely further topside as Aussie house prices continue to fall.
The market forecast above highlights the importance in having a plan in place for navigating and protecting yourself from currency risk in the year ahead.
Similar to a business’ foreign currency policy which provides them with a strategy as to how they manage their currency requirements, you too should have a plan in place if you have a need for a high value transaction this year.
The team at XE will be your eyes and ears in the market and will be able to provide you with advice to navigate any currency risk on the horizon.
We have a range of products designed to help you mitigate your currency risk, including:
If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!
“I trust my bank with my day to day banking needs and on occasion call on them to provide me with mix of other financial services – surely they must be the best option for my foreign currency and international payments needs?”
This is a typical view of many customers as they meet their need to exchange foreign currency.
The reality for a retail client is that the daily buy/sell rates set by the banks incorporate a cost to transact of up to 4-5% plus additional sending and receiving fees. At XE, we do not charge transfer fees, and provide extremely sharp rates of exchange, simply applying a much smaller profit margin when you exchange your currency.
The end result is that our clients regularly save thousands or even tens of thousands of dollars compared to the bank rate on offer.
The international money transfer industry is one of the most strictly regulated industries. XE would not be permitted to transact your currency unless we complied with the same regulatory requirements as the banks.
XE Money Transfer Australasia holds both an Australian Financial Services License and a derivatives issuer license issued by the Financial Markets Authority (FMA NZ) whilst also being a Qualifying Financial Entity (QFE).
Security, trust and credibility are three key considerations when allowing a service provider to move your money across borders.
XE provides the highest level of security via segregated trust accounts. In addition our Nasdaq listed parent company, Euronet Worldwide holds a standard and poors bank grade credit rating. You are dealing with a well-established, compliant and risk averse global currency team that are trusted by more than 330 million people per annum.
Whilst we are on the topic of credibility – you may have seen the outcomes of the recent banking royal commission which highlighted widespread misconduct among most of the Australian banks. Please don’t blindly place your trust in a bank to receive the best possible outcome.
Foreign currency and cross border payments is all that we do.
Our people are equipped with the skills, knowledge and technology that enables XE to move your funds cost effectively, efficiently and securely.
The perceived inconvenience factor of dealing outside of the bank relationship is another common myth.
The reality is that XE will provide a far more efficient, user friendly experience than a bank with an online platform built specifically for foreign currency and cross border payments. And if you need offline support, you’ll be speaking to a helpful, responsive, and accredited XE representative.
If you need advice on moving to Australia from New Zealand, I’ve created a helpful little questionnaire to point you in the right direction. It takes less than 30 seconds, so give it a go!
Hi… I’m JJ Smith.
I’m the creator and editor of Moving to Australia and have been for 15 years! I know everything there is to know about New Zealanders moving their families and life to Australia. Either from first hand experiences and research or through the questions from visitors to this website… and I’m here to help!
I love helping people via Moving to Australia.
Providing the answers to questions we all ask when deciding whether to make the move from New Zealand to Australia. Even giving individual specific advice where needed.
I have learned a lot over the last 15 years from personal experience and through interacting with visitors. This is my job, making sure the information here is comprehensive and up to date.
If you would like to help me, you can use one of my referral partners.
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