Low Mid Canterbury, should we sell, moving to Aus?

[Mission2]

We have a property in a better part of the region worth approximately $500k.

We are moving to Australia due to job offers. Our combined incomes there will be approx $130k and $70k. However the Mrs plans to have a child in amongst this and will be out of action for a year or so.

We only plan to stay 5 or so years to save up enough to semi retire up north.

Given the possibility of our protection from GFC1.0 by borrowing 100s of millions of dollars, then the greed of those borrowing 100s of millions in Auck, then Welli and Dunedin, I think we are sitting on a double bubble, ticking time bomb if you will.

Its my opinion the NZ dollar will drop to 75c Au at best 60c Au at worst. I can see Auckland properties in niche markets losing up to 40% and a general country wide loss of 10%.

Im not saying Im correct, nobody has a crystal ball.

But given our situation, and the property being a slow but steady grower, a loss of 10% would be quite a large impact and take a long time to recover from. So should we sell up all our assets now (about $700k total)?

When moving to Au I estimate to add approximately $500k (plus super) in the time we are there, which hopefully if the currency does tank will be more like $750kNzd. Giving us a combined value of around $1.4m

Being an optimist I hope to find something in KeriKeri for 20% below GRV. Then the rest, do we invest on the down or on the flat? (obviously being the judge of either is usually good luck rather than management).

Any thoughts appreciated.

I use to be on here a lot but closed my account few years back.

[Nick G]

From everything you've said you should sell and not have any concern about the pending disasters sinking you guys.

[datacraft]

I am a director of a company in Sydney and have a lot of interest in Aussie doing well. I am bullish on NZ and bearish on Australia. The mining boom papered over a lot of problems in the Aussie economy. I don't know what industry you are working in but it's always good to have a plan b.

[portofolio]

sell your house now!

[srv]

I don't think you can go too wrong by selling exchange rate is pretty awesome at the moment if you're sending funds to AU. I'm in Sydney at the moment and waiting for the dollar to get better before sending any funds back to NZ.

That money wouldn't go far if you were thinking of buying in Sydney however.

[Nick G]

Whatever you do get specialist tax advice to have your structures set up so any capital gains on NZ assets aren't taxed under Aus law while you are away. PM me if you want an intro to my accountant who specializes in this stuff. Cheers

[Bobsyouruncle]

Assuming a 40% drop in Auckland, or even 10% for that matter is so not sensible I have to assume you are super risk averse. So sell everything up and sleep well at night. Otherwise either sell your property and buy a rental in Auckland till you return or keep yours as a rental. Growth in Auckland is likely to outstrip Canterbury to the power of a lot so I would buy an Auckland rental.

[Mission2]

Im a pretty mid risk adverse, at least that how I set up my Aus super. I just have no faith in creating mortgage bubbles on top of GFC protected bubbles. I think the property has grown $120k in 12 years which pretty good for down that way, but all of the area is pretty savy with their money, meaning their are a lot loaded sorts floating around.

This is more a life change rather than a financial move. I just dont want to wait 6 months sell the property and it gets me 75c AU which Id did when I moved to Aus :-) the first time.

Im not sure what $650k gets in Bris anymore, Ive gotten out that market a decade back. But a 3 bedroom family home is what we are after, or possibly on either of the coasts. But Im not a fan of commuting after living in Sydney 10 years. And my kind of work is limited on the coasts.

I realise Id be up for CGT in NZ if I bring the money back and make a profit, correct? But any money made in Aus coming back to NZ will not, as its one way...?

[Bobsyouruncle]

NZ taxes global income so no to your last point. Sounds like you have a brain so it will come down to your comfort zone. Providing you stay in the market in a main city you'll be fine. I think Oz is in real trouble for the foreseeable future so I would keep my capital invested in New Zealand.

[Meehole]

I know house prices are dropping at present in Melbourne as family member is going to Auction 2 September so has been tracking sales for a while. Also parents changed Oz for Kiwi yesterday and got $ for $.
There will be plenty of Aussies moving here for construction, wages have increased and this is gods own. Oz is stuffed!

[Mission2]

Its only grown at a rate of about 1.5% over the last 12 years and I doubt it would be majorly effected by any real estate recession. But no point renting it as it will earn less ROI than 3.5% in the bank as a rental.

It could be used as cash to get a good chunk off a falling Brisbane market whilst we there? Saving us having to pay rent meaning we can flat out save everything but expenses. Just not sure what would be wise in Bris now, invest a little in a townhouse or a lot in a house, if townhouse id keep the rest left in NZ in term deposit while the dust settles as one option.

If properties in BOI, Coromandel, Whangarei Heads, Nelson to fall substantially would like the option of having the cash their to jump on a bargain long term lifestyle block.

So many ways to tie our shoe laces it gets confusing :-)