This new, educational webinar covers exactly how to invest successfully in the New Zealand market as a strategy along with the pitfalls to be aware of for Australian investors. This interactive, content packed webinar will cover The market fundamentals, market size and historical performance. The key drivers of property market growth. Two speed property economy; Auckland and Christchurch and everywhere else. Where to invest and what to avoid. The key risks of offshore investing in New Zealand. From the Coalface: Case studies from Matthew Gilligan’s client base and personal experience as an investor and developer, and advisor to clients of his accounting practice in Auckland. Tax planning considerations in New Zealand. The support team you need in place on the ground to maximise your results. Where to research, find and analyse New Zealand investment properties.

1. Master Class:
Property Investing In New Zealand
With Matthew Gilligan CA
www.gra.co.nz

2. We help investors
build and manage
their property
portfolios

3. In partnership with…

4. Real Estate Investar’s tools

5. Portfolio Manager Membership
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accounting
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6. Portfolio Builder Membership
Searching, researching, buying,
managing, tracking and accounting
From $99 p.m.

7. • Owns 5.54 properties,
• At an average value of
$335,120 each,
• And a total portfolio value
of $1.85m.
The average Real Estate Investar
Member…

8. Time
Building a portfolio takes time

9. Portfolio
Builder
Portfolio
Manager
Portfolio
Builder
Portfolio Manager
Membership options to match your needs

10. Treat property investment as a business….
Maximise your results

11. Todays 9 topics
1. The market fundamentals, market size and
historical performance.
2. The key drivers of property market growth.
3. Two speed property economy; Auckland
and Christchurch and everywhere else.
4. Where to invest and what to avoid.
5. The key risks of offshore investing in New
Zealand.

12. Todays 9 topics
6. From the Coalface: Case studies from Matthew
Gilligan’s client base and personal experience as an
investor and developer, and advisor to clients of his
accounting practice in Auckland.
7. Tax planning considerations in New Zealand.
8. The support team you need in place on the ground to
maximise your results.
9. Where to research, find and analyse New Zealand
investment properties.
10. A live Q&A following the main presentation.

13. Introducing: Matthew Gilligan CA
NZ property & tax consultant
• Active property investor and developer
• 18 years experience
• Tax and legal
• Structure expert
• Approx. 100 full time staff
Helps GRA’s 2800 family groups
crunch property numbers

14. Property & tax author
Buy online at www.GRA.co.nz

15. The legalese
The views and opinions expressed in this presentation are not intended to be
individual advice. The views and opinions are general in nature, may not be relevant
to an individual's circumstances, and constitute generic concepts only.
The views and opinions expressed are those of the individual speakers and not
necessarily those of Gilligan Rowe & Associates LP or its employees, officers, or
subsidiary entities. Further any views expressed in this presentation are done so
under the exemptions specified under S14 of the the Financial Advisers Act 2008 for
Chartered Accountants.
Nothing contained in this presentation is endorsed by the Financial Markets
Authority. Before making any investment, insurance or other financial decisions, you
should consult an Authorised Financial Adviser.

16. Copyright GRA
All copyright is retained by GRA over content in this presentation
including graphs, data and concepts. Nothing is to be reproduced
without the written permission of Gilligan Rowe & Associates LP

17. NZ property fundamentals
Supply vs. Demand

18. Some pertinent New Zealand Stats
• About:
• Population: 4.5m as at 2015
• @ 2015 1.45m in Auckland (33%)
• 55% of population growth is in Auckland, since 1996.
• Projected to be 61% of the growth in the next 20 years
• Post GFC
• 2 Speed economy: Auckland vs rest of NZ
• Christchurch a close second

19. Population size of cities is small
NZS: 2014 Estimates

20. City size & ethnicity compared

21. Auckland’s population growing
• 1.45 million people live in
Auckland, increasing
17,000 people per yr
• And this is pretty consistent
over last 15 years
Auckland gets the
lions share of
population growth
Christchurch will
be 2nd biggest
growth going
forward
Where in NZ did the population growth go?
500,000 increase in population

22. Projected population growth 2011-2031
Source: GRA Data Analysis

23. NZ Population: main centres compared

24. Auckland population forecast to grow by 700k
to 1m people in next 30 years (+50-66%)
Source: SNZ Subnational Population Projections: 2006 (base)–2031 (October 2012 update)

25. Annual net migration ( Ak v Rest of NZ)

26. Source of Auckland growth: Organic vs.
immigration
GRA Data Analysis: NZ Stats

27. Supply is driven by
• Land availability
• Zoning laws
• Building activity / developer returns
• Availability of credit

28. GRA Data Analysis: NZ Stats
Auckland not making enough houses

29. Land prices soaring
2002 2012
Price of vacant land
Auckland district $100-125k $250-275k
20/25km Queen St radius $100-$125k $300-325k

30. Central government:
Hon. Bill English 6 March 2014
“ Unfortunately, our planning rules
and attitudes within councils (and to
some extent government) have
restricted the supply of new
houses… if we're going to avoid
significant ongoing increases in
house prices and therefore even
higher interest rates, we need
councils to make more positive
decisions for more housing supply
“….
(Mr English is the Minister of Finance in NZ)

31. Auckland land supply
issue…
The Auckland unitary
plan

32. Council amalgamation & new town
planning rules
• Auckland amalgamated 7 councils into one ‘super city’.
• A chance to think big and redesign town planning rules.
• The Auckland Strategic Plan formed 20+ sub plans, one of
which is the Unitary Plan setting the rules for development.
• The unitary plan is in its third year of consultation and wont
be in effect until late 2016.
• But parts are in operation now in special housing areas
(SHAs)

33. The Unitary Plan: Intensification of land use
• A compact city vision;
• Only 30%-40% of growth will be in
greenfields.
• The rest will be in existing
neighbourhoods.
• High density, not sprawl. Up not out.
• Asks for quite a change in Aucklanders’
attitude to housing;
• Smaller houses.
• More apartments, units, terraced houses.
• Fewer, smaller backyards.
• More neighbours.

34. Introducing the new residential zones
4-8 Story

36. Unitary Plan infrastructure concerns
• Demand is ahead of supply.
• Plans for infrastructure intensification
not aligned with residential
intensification.
• Costs and who should pay? Timing
mismatch…
• Infrastructure in some areas already
inadequate especially water,
wastewater and traffic congestion.

37. Infill vs. redevelopment economics

38. Services roll out
Old Pipe New Pipe

39. Auckland supply & demand + Unitary Plan
• Auckland is continuing to grow
• The Unitary Plan tightens land
supply in the short run.
• With some exceptions Auckland
can’t grow up until the services
and rules come into effect.
• This is a great story for capital
growth in the next decade.

40. Unitary Plan implications
• Reduced traffic, diluted service costs, better
city.
• But it’s inflationary:keeps land scarce.
• Coupled with the LVR rules, its socially
regressive;
What chance do poor people to get a
house, unless they have rich parents to
provide a deposit?
How can they save a deposit with rampant
house price inflation?
• Great story long term for investors.

41. Regional variances
• Auckland has the highest capital
growth post the GFC.
• Historically the regions keep up
with growth rates.
• But Auckland’s cost basis is
higher.
• Regional cashflow can be an
investor trap.
• Stay out of one horse towns.

42. Source: Core Logic
Housing stats misleading….black line
has Auckland in it….

43. GRA Data Analysis – Core Logic Medians Post GFC to Dec 2014
Real house prices

44. GRA Data Analysis – Core Logic Medians Post GFC to Dec 2014
Auckland post GFC

45. Christchurch
GRA Data Analysis – Core Logic Medians Post GFC to Dec 2014

46. Wellington & Tauranga
GRA Data Analysis – Core Logic Medians Post GFC to Dec 2014

47. GRA Data Analysis – Core Logic Medians
North Island Regions

48. North Island Regions cont…
GRA Data Analysis – Core Logic Medians Post GFC to Dec 2014

49. GRA Data Analysis – Core Logic Medians
South Island Regions

50. My view of Auckland house prices
• I think most Kiwis are cautious of
perceived Auckland “peak”.
• It seems Chinese buyers are immune
to our caution.
• LVR ratios a question mark.
• Auckland is a bubble, but less volatile
than other NZ markets.
• Property cycle: Value elsewhere in
NZ, with ripple effect.

51. Key Point:
Auckland has tight supply
and bullet proof demand.
This reduces risk

52. Build cashflow and capital growth
$10k
positive
$10k
neg

53. Where the opportunities lay
• Growth ‘ripples around’.
• Local knowledge helps to stay ‘ahead of
the market’.
• Some suburbs in Auckland have done
better than others.
• Same story in Christchurch.
• Understanding what’s going on helps us
to identify where opportunities to grow
wealth might lay.

55. Rest of NZ?
As long the area has good fundamentals.
Our view: why leave Auckland?
Maybe for cashflow
& counter cyclical story…

56. New Zealand property cycle
• Past peaks: 1987 – 1997 – 2007
• Past downturns commenced: 1988 – 1998 – 2008
• Feels very much like 2005 in Auckland;
• Very hot property market.
• Everyone thinks property is ‘overvalued’.
• Prices are rising.
• No one knows. Past performance is not a
guarantee of future performance.

57. The effect of getting timing wrong
$
Loss of Wealth
Gain
Loss of Potential Equity
Gain
Most people buy here !
Most people sell here !

58. Some deals I have purchased recently
182 Shirley Road, Papatoetoe, Auckland

59. 182 Shirley Road, Papatoetoe, Auckland

60. 182 Shirley Road, Papatoetoe, Auckland

61. 3 Jodie Place, Flat Bush, Auckland

64. 686 Great North Road, Grey Lyn, Auckland

65. 686 Great North Road, Grey Lyn, Auckland

66. You can get growth and
cashflow together in one
asset in NZ

67. 8 Westwood Tce, St. Mary’s Bay, Auckland

68. 8 Westwood Tce, St. Mary’s Bay, Auckland

70. Might build this ? X 3

71. www.gra.co.nz

72. Tax structures
in New Zealand
How should you own
your NZ assets ?

73. Aussie – NZ tax considerations
• New Zealand has:
• No capital gains tax.
• No stamp duty.
• You still have to pay CGT on
your world wide income, to the
ATO in Australia.

74. NZ tax considerations
• Your tax structure needs to be driven
by your local accountant in Australia
• What works in NZ can be a disaster
in Aussie;
• Companies get no CGT discount,
lock up losses.
• Migrating out of the wrong
structure triggers CGT.
• You can get trapped into the wrong
structure and exposed to tax you
don’t need to pay.

75. Aussie – NZ tax considerations
• How are property gains taxed in
NZ?
• Intention test – what was in your
mind ?
• Buy to hold – capital gains not
taxable.
• Buy to sell – gains form part of
business income/taxable.

76. NZ Tax Considerations
• More next month on tax structures
in our next webinar including;
• GST.
• Smart angles to NZ tax for
Aussies investing in NZ.
• Development and building
exemptions.
• Deduction limitations for Aussies
to watch out for.

77. Typical Kiwi Structure
Not Suitable For Aussies
Bob
Property
$15k losses
Mary
Look Through
Company
Spouse
Salary
Home
Protect Your Home
Trust

78. Trading Trust Structure
Better For Aussies
Investment
Trust
Income Split
To Aussie
Family
Smith Family
Trustee Limited
NZ Lawyer /
Accountant
(Shareholder)
John Smith
(Director / Shr)
NZ Property Business
John Smith
+ Spouse ?

79. Trading Trust Structure
Better For Aussies
John Smith
NZ Property Business
High Income Earner
No double tax
on profits
Loss flow through
across jurisdictions
CGT Discount

80. www.gra.co.nz

81. www.gra.co.nz/requestameeting

82. Tax structure meetings
• Generic discussion on NZ Tax & Property;
• Structure design and dove tailing into your Australian
advisor.
• NZ accounting & tax support.
• NZ cross boarder tax specialists – most countries.
• Introduction to NZ buyers and seller’s agents for property.
• Setting up Xero & helping support Real Estate Investar.

83. Property & tax author
Buy online at www.GRA.co.nz

84. • NZ membership available at www.realestateinvestar.co.nz.
• Australian members can add on NZ My Valuer & My research tools for
$99 month. Email david@realestateinvestar.com.au to arrange upgrade.
• Do you research. All NZ suburb performance reports are online for
members.
• Build a team. Whether you are a new or experienced investor, you need a
team behind you to maximise your results.
How can Real Estate Investar help in NZ?
Start today and your
first 21 days are free
www.realestateinvestar.com.au
www.realestateinvestar.co.nz

85. Questions? www.gra.co.nz