Have a chat to Kris at Property Financial Solutions in Auckland and see what bright ideas he has for you – he's very innovative and has a team based in both NZ and Australia so may be able to sort out a way for you to release your equity …. http://www.propertyfs.co.nz/
I dont like it when people try and second guess the market. But having been in NZ 4 times in the past 3 years its market is so over priced it is not funny and its economy is presently tanking. NZ wages are significantly lower then Oz and the domestic RE purchasers are almost priced out of the market from the overseas investors over the last few years. NZ wages are significantly lower then OZ so high yeilds are unsustainable.
Interest rates in NZ are much higher and if you use the Aus equity you are playing a Forex gamble on that $40K
Im not saying dont do it and I have no doubt their is still some small pockets where value exists. But tread carefully and consider the overall market.
After reading the [revious comments I believe another question to consider is that if you looking at buying further investments in the future besides this one in New Zealand. When you borrow in the future can you legitimately declare the rental income for this overseas property. Of course there are ways of doing this with low document loans but the rules for these are tightening up considerably.
My suggestion is to consider what impact this NZ purchase may have on the growth of your property portfolio over the medium to long term. This is the same question I pose to any of my clients who are looking to invest in properties outside Australia.
It then begs the question about how clearly do you have a clearly defined property investment plan.