Buying guide
8 hidden costs of buying a house in NZ
Read this and buy with your eyes (and your wallet) open
Last updated: 29 October 2024
Property in New Zealand costs more than its purchase price. You’ll also have to pay for services while house hunting, during the purchase process and when the home is finally yours.
These can add up quickly, so it’s always good to know what to expect and plan ahead.
Extra costs to consider when buying a house
House hunting
As soon as you start looking for a house the costs could start to add up. Apart from your time, you should expect to cover the following costs during your search:
1. Building inspections – Starting at $400 + GST
Before you buy a home it’s almost always a good idea to get a building inspection. Your inspector will have a good look around the property and then provide a report on its condition, including any problem areas. These reports can help you avoid properties that have costly issues, or they can act as a tool for negotiating the purchase price down. Note – the $400 price tag is the starting point and building report costs can increase for larger homes or more in depth or technical inspections.
2. LIM reports and title searches – $367 for a LIM in Auckland
When you’re doing due diligence on a property chances are you’ll need to purchase its land information memorandum, or LIM, then have your lawyer go over it and explain its implications. This is a report that includes all the information council holds about the property like zoning details, land features, natural risks, rates information, building consents or permits issued and much more. The price in Auckland starts at $367, but this will vary depending on where you are in the country.
There may be additional costs for buying an apartment.
Purchase costs
3. Lawyer's fees - $800 to $3,000+
Every time you buy and sell a home you need a lawyer to help you work out all the details and complete the necessary paperwork. This can cost as little as $800 for very simple purchases, but more often costs $1,500 to $2,500.
4. Mortgage fees – $100 to $900
Most mainstream banks don’t charge a fee to establish your loan, but some do – especially non bank lenders. This can vary considerably depending on the lender, so make sure you’re aware of what costs you’ll incur before you sign anything.
5. Insurance - $2,725 annual national average according to Quashed
Most lenders will require that you have house insurance before you settle (pay for and own) a property. Luckily, you can get a quote in minutes right now with Trade Me House Insurance so that you have one less thing to worry about.
At this stage, it’s also worth considering life and income protection insurance, especially if you have dependents who rely on your income.
6. Low equity margins - 0.25% to 1.5% of loan value per annum
If you don’t have a 20% deposit, banks will often charge you a higher interest rate, to cover the additional risk you pose as a ‘low equity borrower’. If you have a small deposit it’s important to remember this when doing your sums before you buy.
Moving isn't free!
Moving in
7. Fixing stuff - $100 to $10,000+
When you buy a home there may be stuff you want to fix as soon as you move in. Keep this in mind during the purchase process, and get quotes for all the work you need to do before you make an offer. The cost of fixing these issues can be a great bargaining chip with the vendor (or a reason to avoid the home if they’re too expensive).
8. Moving costs - $0 to $5,000+
It’s so easy to forget moving costs when you buy a house. When you’re doing your numbers make sure you include a figure to cover moving, with more allocated if you’re shifting from overseas or across the motu.
Ready to start hunting for property? Get more insights, tips and guides, and start your search at Trade Me Property.
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