21 December

The Real Estate Institute of New Zealand has released its Capital Gains and Rental Yields Report for the third quarter, showing regions with the best growth and the best yields for investors – and these areas are the winners.

Bindi Norwell, Chief Executive at REINZ says: “Once again, some of the smaller regions in the country continue to provide the best returns for investors.”

Take the West Coast, where yields went up 6.3 per cent year-on-year. It was the only region in the country to see a yield over the 5 per cent mark.

And houses on the West Coast had a double win: they also hit the top of the capital gains list, with median values increasing 27 per cent for the three months ending September, when compared to the same time last year.

Median prices leaping from $196,000 to $249,000 made it the stand-out region for residential property investors in New Zealand.

Taranaki among the top

In second place for returns was Taranaki. It saw the third-highest capital gains in the country, up 18.8 per cent from $383,000 to $455,000 – and it also had the fourth-highest yield, at 4.3 per cent.

Following closely behind was Gisborne, with the highest capital gains for the country (up 27.6 per cent from $384,000 to $490,000, and a pretty good yield, at 4 per cent.

But spare a thought for those with rental properties in Tasman and Nelson – they have the lowest capital gains in the country.

They were up just 9.6 per cent, from $615,000 to $674,000, and had the second to lowest annual yield of all regions (3.5 per cent), making it the worst performing region for residential property investors.

Norwell said: “Many investors want to purchase investment properties in their home town to make it easier to manage and do maintenance, but sometimes the best returns can be found a little further afield.”

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