The Indicator tracks the Real Estate Institute of New Zealand’s lower quartile selling price for three bedroom houses (still the most common type of rental stock) for three bedroom houses in 56 locations around the country where there is a high level of rental activity.
That information is then paired with bond data showing the median rents for newly-let three bedroom houses in the same locations to produce an Indicative Gross Rental Yield for each area.
A Gross Rental Yield is a property’s annual rental income expressed as a percentage of its purchase price, with a high yield providing an investor with a higher rental return than a lower yielding property.
Lower quartile prices were higher in the six months to December last year than they were for the six months to September in 47 of the 56 locations monitored, and lower in 8 locations: Tauranga Central/Greerton, Cambridge/Leamington, Holdens Bay/Ngapuna/Owhata (Rotorua), Ngongotaha/Pleasant Heights/Kotu (Rotorua), Vogeltown/Berhampore/Newtown (Wellington), Motueka, Blenheim and Ashburton, and unchanged in one: Taradale (Napier).
On the other hand less than half the locations monitored had rent rises over the same period, with median rents rising in 27 locations, declining in six and remaining unchanged in 23.
The net effect of prices rising in far more locations than rents did was to push the indicative yields down in 34 locations and up in 13. They remained unchanged in nine.
That suggests that in most locations, investors purchasing residential rental properties now are likely to be paying more and receiving lower rental returns than they would have if they’d purchased the same property six months ago.
The table below tracks the Indicative Rental Yields at the 56 locations monitored by interest.co.nz, from December 2016 to December 2019. A fuller version of the table going back to 2014 is available here.
 Indicative gross rental yields for three bedroom houses in 56 selected areas with high rental activity during the previous six months. Based on REINZ lower quartile selling prices and median rents recorded by Tenancy Services' Bonds Centre in each area over the previous six months. |
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| Indicative gross residential rental yields for the six months ending: | |||||||||||||
| Town/region | Yield % Dec 2019 | Yield % Sept 2019 | Yield % June 2019 | Yield % March 2019 | Yield % Dec 2018 | Yield % Sept 2018 | Yield % June 2018 | Yield % March 2018 | Yield % Dec 2017 | Yield % Sept 2017 | Yield % June 2017 |
Yield % March 2017 | Yield % Dec 2016 |
| Whangarei: | |||||||||||||
| Kamo/Tikipunga/Kensington | 5.4 | 5.5 | 5.3 | 5.3 | 5.5 | 5.5 | 5.5 | 5.4 | 5.5 | 5.3 | 5.5 | 5.4 | 5.4 |
| Rodney - Orewa/Whangaparaoa | 4.1 | 4.2 | 4.2 | 4.2 | 4.1 | 3.9 | 4.0 | 4.0 | 4.0 | 4.0 | 4.0 | 4.0 | 3.8 |
| North Shore: | |||||||||||||
| Beach Haven/Birkdale | 4.1 | 4.2 | 4.1 | 3.8 | 3.8 | 3.9 | 3.9 | 3.8 | 3.8 | 4.0 | 3.8 | 3.7 | 3.7 |
| Torbay | 3.9 | 4.0 | 4.0 | 3.8 | 3.9 | 3.9 | 3.7 | 3.7 | 3.6 | 3.6 | 3.6 | 3.7 | 3.6 |
| Waitakere: | |||||||||||||
| Glen Eden | 4.2 | 4.3 | 4.3 | 4.0 | 4.1 | 4.1 | 3.9 | 3.8 | 3.9 | 3.9 | 3.9 | 4.0 | 3.8 |
| Massey/Royal Heights | 4.3 | 4.3 | 4.3 | 4.0 | 4.0 | 4.0 | 4.2 | 4.2 | 3.9 | 3.9 | 3.8 | 4.0 | 3.9 |
| Henderson | 4.4 | 4.6 | 4.4 | 4.1 | 4.2 | 4.1 | 4.1 | 4.2 | 4.1 | 4.1 | 4.0 | 3.9 | 3.8 |
| Central Auckland: | |||||||||||||
| Avondale | 4.2 | 4.3 | 4.2 | 3.9 | 3.9 | 4.1 | 4.0 | 3.7 | 3.6 | 3.6 | 3.5 | 3.6 | 3.6 |
| Manukau: | |||||||||||||
| Highland Park | 3.4 | 3.5 | 3.8 | 3.4 | 3.3 | 3.3 | 3.6 | 3.7 | 3.6 | 3.8 | 3.6 | 3.5 | 3.5 |
| Papakura/Drury/Karaka | 4.7 | 4.7 | 4.8 | 5.1 | 5.0 | 4.9 | 4.7 | 4.6 | 4.7 | 4.7 | 4.3 | 4.3 | 4.4 |
| Franklin - Pukekohe/Tuakau | 4.4 | 4.5 | 4.6 | 4.7 | 4.6 | 4.5 | 4.6 | 4.7 | 4.7 | 4.8 | 4.8 | 4.6 | 4.4 |
| Hamilton: | |||||||||||||
| Deanwell/Melville/Fitzroy | 4.9 | 5.0 | 5.0 | 4.9 | 4.9 | 5.1 | 5.1 | 5.1 | 4.9 | 4.8 | 4.8 | 4.8 | 5.0 |
| Fairfield/Fairview Downs | 4.8 | 4.9 | 4.7 | 4.4 | 4.4 | 4.8 | 4.7 | 4.6 | 4.6 | 4.5 | 4.5 | 4.9 | 4.8 |
| Te Kowhai/St Andrews/Queenswood | 4.3 | 4.6 | 4.5 | 4.6 | 4.7 | 4.7 | 4.7 | 4.7 | 4.6 | 4.6 | 4.5 | 4.4 | 4.3 |
| Cambridge/Leamington | 4.3 | 4.5 | 4.4 | 4.4 | 4.5 | 4.6 | 4.6 | 4.3 | 4.2 | 4.4 | 4.4 | 4.6 | 4.6 |
| Te Awamutu | 5.1 | 5.0 | 4.9 | 4.9 | 4.9 | 5.1 | 5.0 | 4.9 | 5.1 | 5.0 | 5.1 | 5.0 | 5.1 |
| Tauranga: | |||||||||||||
| Tauranga Central/Greerton | 4.6 | 4.5 | 4.8 | 5.5 | 5.1 | 4.9 | 4.8 | 4.7 | 4.8 | 5.1 | 4.7 | 4.6 | 4.4 |
| Bethlehem/Otumoetai | 4.1 | 4.3 | 4.2 | 3.7 | 4.0 | 4.2 | 4.2 | 4.3 | 4.3 | 4.1 | 4.0 | 4.1 | 3.7 |
| Mt Maunganui | 4.1 | 4.2 | 4.4 | 4.6 | 4.5 | 4.6 | 4.6 | 4.4 | 4.2 | 4.3 | 4.4 | 4.4 | 4.2 |
| Pyes Pa/Welcome Bay | 4.7 | 4.5 | 4.7 | 4.8 | 4.7 | 4.5 | 4.6 | 4.4 | 4.6 | 4.7 | 4.3 | 4.8 | 4.8 |
| Kaimai/Te Puke | 5.3 | 5.2 | 5.3 | 5.0 | 5.1 | 5.1 | 4.8 | 4.9 | 5.5 | 5.0 | 4.9 | 5.3 | 5.4 |
| Whakatane | 5.5 | 5.7 | 5.4 | 5.7 | 5.9 | 5.8 | 6.1 | 6.3 | 6.0 | 6.1 | 6.0 | 6.1 | 5.8 |
| Rotorua: | |||||||||||||
| Holdens Bay/Owhata/Ngapuna | 6.3 | 6.1 | 6.5 | 6.1 | 6.3 | 7.0 | 7.8 | 7.8 | 7.4 | 9.3 | 10.5 | 8.0 | 9.7 |
| Kuirau/Hillcrest/Glenholm | 4.9 | 5.4 | 6.0 | 4.9 | 4.9 | 5.5 | 5.4 | 5.8 | 4.9 | 5.6 | 5.5 | 4.9 | 7.3 |
| Ngongotaha/Pleasant Heights/Koutu | 5.9 | 5.5 | 6.0 | 6.1 | 6.5 | 6.7 | 6.0 | 6.7 | 7.6 | 8.5 | 6.2 | 8.6 | 8.2 |
| Hastings - Flaxmere | 6.3 | 7.0 | 7.9 | 8.2 | 8.3 | 8.4 | 9.2 | 9.6 | 9.8 | 9.9 | 9.3 | 8.9 | 8.6 |
| Napier - Taradale | 4.7 | 4.5 | 4.6 | 5.0 | 5.1 | 4.9 | 4.7 | 4.6 | 4.4 | 4.4 | 4.9 | 5.0 | 4.9 |
| Taranaki: | |||||||||||||
| New Plymouth Central/Moturoa | 5.4 | 5.5 | 4.7 | 5.3 | 5.1 | 4.6 | 4.8 | 4.6 | 4.7 | 5.4 | 4.9 | 4.7 | 5.3 |
| Waitara/Inglewood | 6.3 | 7.7 | 6.7 | 7.6 | 7.4 | 6.6 | 6.5 | 6.4 | 6.1 | 6.0 | 7.2 | 8.1 | 7.0 |
| Whanganui | 7.4 | 7.6 | 7.8 | 8.1 | 8.2 | 8.5 | 9.0 | 9.0 | 8.9 | 8.7 | 8.6 | 9.1 | 9.7 |
| Palmerston North: | |||||||||||||
| Kelvin Grove/Roslyn | 5.2 | 5.3 | 5.7 | 5.6 | 5.7 | 5.9 | 6.2 | 6.3 | 6.5 | 6.3 | 6.5 | 6.6 | 6.6 |
| Palmerston North Central | 4.7 | 4.8 | 5.3 | 5.3 | 5.2 | 5.1 | 5.1 | 5.0 | 4.9 | 5.5 | 6.0 | 5.9 | 5.6 |
| Takaro/Cloverlea/Milson | 5.2 | 5.5 | 5.6 | 5.6 | 5.7 | 5.8 | 6.1 | 6.0 | 5.9 | 6.2 | 6.2 | 6.1 | 6.3 |
| Kapiti Coast: | |||||||||||||
| Paraparaumu/Raumati | 4.5 | 4.7 | 4.8 | 4.5 | 4.8 | 5.2 | 5.0 | 4.9 | 5.0 | 5.0 | 4.9 | 4.8 | 5.3 |
| Waikanae/Otaki | 4.5 | 4.4 | 4.7 | 4.5 | 4.4 | 4.5 | 4.5 | 5.4 | 5.2 | 4.7 | 4.7 | 5.2 | 5.5 |
| Upper Hutt: | |||||||||||||
| Heretaunga/Silverstream | 5.2 | 5.1 | 5.1 | 4.9 | 5.0 | 4.9 | 4.9 | 4.8 | 5.0 | 5.4 | 4.7 | 4.7 | 4.6 |
| Totara Park/Maoribank/Te Marua | 5.0 | 5.2 | 5.3 | 5.2 | 5.3 | 5.6 | 5.6 | 5.6 | 5.6 | 5.7 | 5.8 | 5.8 | 5.2 |
| Lower Hutt: | |||||||||||||
| Epuni/Avalon | 4.7 | 4.9 | 4.8 | 5.2 | 5.1 | 4.5 | 4.7 | 5.0 | 4.5 | 4.8 | 4.9 | 5.1 | 5.6 |
| Taita/Naenae | 5.3 | 5.3 | 5.0 | 5.4 | 5.5 | 5.4 | 5.5 | 5.7 | 5.9 | 5.5 | 5.6 | 5.8 | 6.1 |
| Wainuiomata | 5.1 | 5.3 | 5.3 | 5.5 | 5.5 | 5.3 | 5.6 | 5.6 | 5.6 | 5.7 | 5.9 | 5.9 | 6.3 |
| Wellington: | |||||||||||||
| Johnsonville/Newlands | 4.7 | 4.7 | 4.7 | 4.9 | 5.1 | 5.0 | 4.9 | 4.9 | 4.6 | 5.0 | 5.0 | 4.9 | 4.8 |
| Vogeltown/Berhampore/Newtown | 5.0 | 5.0 | 5.0 | 4.6 | 4.4 | 4.3 | 5.0 | 4.9 | 4.3 | 4.5 | 4.5 | 4.2 | 4.1 |
| Tasman: | |||||||||||||
| Motueka | 4.0 | 4.0 | 4.2 | 4.3 | 4.4 | 4.3 | 4.2 | 4.2 | 4.5 | 5.0 | 4.4 | 4.0 | 4.0 |
| Richmond/Wakefield/Brightwater | 4.3 | 4.3 | 4.5 | 4.4 | 4.3 | 4.3 | 4.5 | 4.5 | 4.6 | 4.8 | 4.6 | 4.7 | 4.6 |
| Nelson - Stoke/Nayland/Tahunanui | 4.7 | 4.7 | 4.7 | 4.6 | 4.5 | 4.7 | 4.8 | 4.9 | 4.9 | 4.8 | 5.0 | 5.1 | 5.1 |
| Blenheim | 5.6 | 5.5 | 5.3 | 5.3 | 5.3 | 5.4 | 5.7 | 5.6 | 5.5 | 5.7 | 5.6 | 5.8 | 6.3 |
| Christchurch: | |||||||||||||
| Hornby/Islington/Hei Hei | 5.8 | 5.8 | 5.8 | 5.9 | 5.8 | 6.0 | 5.9 | 5.7 | 5.8 | 5.6 | 5.6 | 5.6 | 5.7 |
| Riccarton | 4.3 | 4.4 | 5.9 | 5.2 | 5.1 | 5.6 | 5.6 | 5.2 | 5.7 | 5.1 | 4.7 | 5.0 | 5.2 |
| Woolston/Opawa | 6.6 | 6.4 | 6.4 | 6.5 | 7.1 | 7.2 | 7.4 | 7.8 | 6.7 | 6.2 | 6.0 | 6.2 | 6.5 |
| Ashburton | 7.5 | 6.3 | 5.7 | 5.8 | 6.3 | 6.3 | 5.2 | 5.3 | 5.8 | 6.3 | 7.0 | 8.3 | 8.4 |
| Timaru | 5.7 | 5.8 | 6.0 | 6.1 | 6.1 | 5.8 | 5.6 | 5.8 | 6.2 | 6.0 | 5.7 | 6.0 | 5.9 |
| Queenstown/Frankton/Arrowtown | 3.7 | 4.0 | 4.2 | 4.0 | 4.1 | 4.3 | 4.2 | 4.2 | 4.3 | 4.4 | 4.6 | 4.3 | 4.1 |
| Dunedin: | |||||||||||||
| Kenmure/Mornington | 4.7 | 5.2 | 5.3 | 5.1 | 5.5 | 5.7 | 6.2 | 5.9 | 5.4 | 5.8 | 6.3 | 7.5 | 6.5 |
| Mosgiel | 5.0 | 5.2 | 5.3 | 5.2 | 5.3 | 5.5 | 5.8 | 5.6 | 5.4 | 5.4 | 5.4 | 5.5 | 5.7 |
| South Dunedin/St Kilda | 5.7 | 6.2 | 6.5 | 6.9 | 6.4 | 6.8 | 7.3 | 7.6 | 7.6 | 8.6 | 8.0 | 7.9 | 7.5 |
| Invercargill | 6.7 | 7.1 | 7.0 | 7.2 | 7.7 | 8.3 | 8.2 | 7.9 | 7.9 | 8.9 | 8.3 | 8.3 | 7.9 |
|
Source: Base data from REINZ / MBIE *Yield is a property's annual rent expressed as a percentage of its purchase price. The indicative yield figures in this table are gross, and are calculated from the REINZ's lower quartile selling price for three bedroom houses in each area during the previous 6 months, and the median rent for three bedroom houses calculated from new tenancy bonds received by the Ministry of Business Innovation and Employment for the same areas/period. This gives an indication of the gross rental yield that would have been achieved in each area if a three bedroom house was purchased at the lower quarter price and rented at the median rent for that area. |
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