Gross residential rental yields below bank deposit rates in parts of Auckland as investors chase capital gains. Yields on a slippery slope around the rest of the country

By Greg Ninness

Rental yields on residential investment properties continue to decline across the country as property prices rise faster than rents, according to the latest figures in interest.co.nz's Rental Yield Indicator. 

The Indicator tracks the gross rental yield an investor would receive if they purchased a three bedroom house at the lower quartile price for that type of property in 56 places around the country where there is a high level of rental activity, and then rented it out at the median weekly rent for three bedroom houses in the same location.

In the six months to September the yields were lower than they were in the six months to June in 35 of the 56 areas monitored, unchanged in nine areas and higher in 12 (see table below).

Of all the Auckland areas monitored, the gross yields ranged from 3.4% in Torbay on the North Shore and Highland Park in the eastern suburbs, to 4.4% in Papakura/Drury/Franklin. By way of comparison advertised bank term deposit rates are currently as high as 3.80% for five year terms. See all bank one to five year term deposit rates here.

Chasing capital gains

Two years ago the yields in Auckland ranged from 4.2% to 6%, suggesting rental returns in Auckland have dropped by around a quarter over the last two years. 

That is before deducting expenses such as interest payments on any mortgage a property might be carrying, rates, insurance or repairs and maintenance and does not make any allowance for periods of vacancy when there may not be any rental income coming in, all of which could significantly reduce the cash flow available to provide an income stream to the landlord.

That suggests investors who are still buying residential rental properties in Auckland are more likely to be chasing capital gains rather than the income stream they provide.

Around the rest of the country, the indicative rental yields are higher than they are in Auckland but are mostly showing a similar downward trend.

In Hamilton the indicative yields ranged from 4.6% to 5.1% in the six months to September, compared to 5.8% to 7% in the same period two years ago. In Tauranga the range was 4.2% to 5.5% in the six months to September, down from 5.2% to 5.9% two years previously.

For investors chasing better income returns, the indicative yields remain above 6% in Whakatane, Rotorua, Hastings, Wanganui, parts of Taranaki, Palmerston North, parts of the Hutt Valley, Blenheim, parts of Christchurch, Timaru, Ashburton, parts of Dunedin and Invercargill.

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 MBIE median rents in each area.
 
Town/region Yield % Sep-16 Yield % Jun-16 Yield % Mar 16 Yield %
Dec-15
Yield %
Sep-15
Yield %
Jun-15
Yield %
Mar-15
Yield %
Dec-14
Yield %
Sep-14
Yield %
Jun-14
Whangarei - Kamo/Tikipunga/Kensington 5.9 6.1 6.0 5.6 7.1 6.5 6.9 7.6
6.4
5.9
                 
 
 
Rodney - Orewa/Whangaparaoa 3.9 4.1 4.1 4.1 4.3 4.5 4.5 4.6
4.8
4.2
                 
 
 
North Shore:                
 
 
Beachhaven/Birkdale 3.7 3.7 3.9 3.8 3.9 4.0 4.3 4.3
4.6
4.9
Torbay 3.4 3.6 3.8 3.6 3.8 4.0 4.5 4.6
4.5
4.5
                 
 
 
Waitakere:                
 
 
Glen Eden 3.7 3.9 4.0 4.0 4.1 4.3 4.6 4.9
5.1
5.0
Massey/Royal Heights 3.8 4.1 4.1 4.0 4.1 4.4 4.6 4.9
5.1
5.0
Henderson 3.8 3.8 4.1 4.1 4.1 4.4 4.7 4.9
5.0
5.3
                 
 
 
Central Auckland:                
 
 
Avondale 3.7 3.6 3.7 3.7 3.9 4.1 4.2 4.4
4.5
n.a
                 
 
 
Manukau:                
 
 
Highland Park 3.4 3.3 3.3 3.6 3.6 3.8 3.8 4.1
4.3
4.6
Papakura/Drury/Karaka 4.4 4.7 4.8 4.8 4.9 5.5 5.6 5.9
6.0
6.0
Franklin - Pukekohe/Tuakau 4.3 4.5 4.9 5.0 5.0 5.3 5.5 5.6
5.6
5.8
                 
 
 
Hamilton:                
 
 
Deanwell/Melville/Fitzroy 5.1 5.4 5.3 5.5 6.2 6.8 6.9 6.9
6.9
6.9
Fairfield/Fairview Downs 4.8 5.1 5.4 5.7 6.0 6.8 6.7 6.2
7.0
6.9
Te Kowhai/St Andrews/Queenswood 4.6 4.7 4.7 4.9 5.3 5.4 5.4 5.6
5.8
5.5
                 
 
 
Cambridge/Leamington 4.7 4.8 5.2 5.3 5.2 5.5 5.5 5.6
5.9
5.9
                     
Te Awamutu 5.2 5.2 5.7 6.2 6.3 6.5 6.2 6.3
6.4
6.0
                 
 
 
Tauranga:                
 
 
Tauranga Central/Greerton 4.3 3.7 5.2 5.2 5.6 6.0 6.1 5.9
5.9
n.a.
Bethlehem/Otumoetai 4.2 4.2 4.6 4.8 4.8 4.5 4.8 5.3
5.4
5.2
Mt Maunganui 4.2 4.4 4.8 4.6 4.7 5.4 5.7 5.6
5.2
5.2
Pyes Pa/Welcome Bay 4.9 4.8 5.4 5.5 5.3 5.9 5.7 5.7
5.8
5.7
Kaimai/Te Puke 5.5 5.6 5.8 5.9 6.2 6.4 6.2 6.2
5.7
5.6
                     
Whakatane 6.5 6.6 6.4 7.1 7.3 6.7 6.3 6.7
6.9
n.a.
                     
Roturua:                    
Holdens Bay/Owhata/Ngapuna 10.7 9.4 8.7 8.3 8.7 n.a. n.a. n.a. n.a. n.a.
Kuirau/Hillcrest/Glenholm 7.5 6.4 5.9 6.3 6.6 n.a. n.a. n.a. n.a. n.a.
Ngongataha/Pleasant Heights/Koutu 7.2 7.9 7.7 8.0 8.2 n.a. n.a. n.a. n.a. n.a.
                     
Hastings - Flaxmere 9.4 9.3 10.9 11.5 11.0 12.1 12.2 11.7
11.8
12.0
                 
 
 
Napier - Taradale 5.1 5.5 5.4 5.6 5.5 5.3 6.2 6.3
6.1
6.1
                     
Taranaki:                    
New Plymouth Central/Moturoa 5.1 5.4 5.8 5.4 5.5 n.a. n.a. n.a. n.a. n.a.
Waitara/Inglewood 7.7 7.7 8.8 8.9 8.0 n.a. n.a. n.a. n.a. n.a.
                     
Whanganui 9.7 10.3 9.6 10.0 14.9 n.a. n.a. n.a. n.a. n.a.
                     
Palmerston North:                    
Kelvin Grove/Roslyn 7.0 7.3 7.4 7.2 7.2 n.a. n.a. n.a. n.a. n.a.
Palmerston North Central 6.5 6.3 5.6 5.5 6.2 n.a. n.a. n.a. n.a. n.a.
Takaro/Cloverlea/Milson 6.7 6.8 7.2 7.1 7.3 n.a. n.a. n.a. n.a. n.a.
                 
 
 
Kapiti Coast:                
 
 
Paraparaumu/Raumati 5.6 5.7 5.9 6.0 6.1 6.2 6.1 6.1
5.9
n.a.
Waikanae/Otaki 5.8 5.8 5.9 6.5 6.8 6.6 6.7 5.5
5.4
6.1
                 
 
 
Upper Hutt:                    
Heretaunga/Silverstream 5.3 5.6 5.8 5.8 6.1 n.a. n.a. n.a. n.a. n.a.
Totara Park/Maoribank/Te Marua 5.7 6.2 6.3 6.2 6.8 n.a. n.a. n.a. n.a. n.a.
                     
Lower Hutt:                    
Epuni/Avalon 5.1 5.5 5.8 5.2 5.1 n.a. n.a. n.a. n.a. n.a.
Taita/Naenae 6.2 6.5 6.8 6.9 7.1 n.a. n.a. n.a. n.a. n.a.
Wainuiomata 7.0 7.2 7.7 7.7 7.7 n.a. n.a. n.a. n.a. n.a.
                     
Wellington:                
 
 
Johnsonville/Newlands 4.8 5.2 5.5 5.4 5.6 5.8 5.6 5.5
6.2
5.9
Vogeltown/Berhampore/Newtown 4.6 4.9 5.4 5.2 5.5 5.1 5.5 5.2
5.6
5.8
                 
 
 
Tasman:                
 
 
Motueka 4.7 5.3 5.2 5.4 5.3 5.3 5.5 5.6
5.5
5.2
Richmond/Wakefield/Brightwater 4.8 5.3 5.3 5.3 5.5 5.6 5.6 5.8
5.9
6.0
                     
Nelson - Stoke/Nayland/Tahunanui 5.2 5.3 5.5 5.7 5.8 5.9 5.7 5.7
6.0
6.0
                     
Blenheim 6.5 6.5 7.0 7.0 6.4 6.5 6.5 6.6
6.5
6.1
                 
 
 
Christchurch:                
 
 
Hornby/Islington/Hei Hei 6.1 6.1 6.0 6.0 6.2 6.2 6.3 6.5
6.3
6.4
Riccarton 5.5 5.0 5.7 5.0 4.9 5.9 5.2 4.9
5.1
5.7
Woolston/Opawa 6.6 7.4 6.3 6.4 6.6 6.8 7.3 7.2
8.0
7.9
                     
Ashburton 6.3 6.1 6.2 7.0 6.9 7.0 6.8 6.7
7.2
6.8
                 
 
 
Timaru 6.1 6.4 6.5 6.4 6.2 6.6 6.8 6.7
6.3
n.a.
                 
 
 
Queenstown/Frankton/Arrowtown 4.5 4.3 4.6 5.2 5.0 4.8 4.9 4.7
5.3
5.4
                 
 
 
Dunedin:                    
Kenmure/Mornington 6.3 6.7 7.9 7.1 6.6 n.a. n.a. n.a. n.a. n.a.
Mosgiel 5.7 5.7 6.4 6.4 6.1 n.a. n.a. n.a. n.a. n.a.
South Dunedin/St Kilda 8.1 7.4 7.2 8.0 8.2 n.a. n.a. n.a. n.a. n.a.
                     
Invercargill 8.3 8.4 8.7 9.1 9.0 6.7 9.0 9.2
9.5
n.a.

Source : REINZ / MBIE

* Yield is a property's annual rent expressed as a percentage of its purchase price. The yield figures in this table are gross, and are calculated from the REINZ's lower quartile selling price for 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.

 

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73 Comments

up
20

so how do the "investors" whos net return is lower than the interest rate charged on their loan and claim a refund on their personal income tax year after year get away with paying no tax on the GC when they sell IRD.
the intent is clear
and for all the apologists out there that come back with they do, really how many do you know that have fronted up and said here mr taxman take some money.

You cannot hate on people for doing what they are incentivised to do.
This is a flaw in central government policy, not a flaw in ethics or character.

[ woah! Keep the personal abuse out of here! Ed]

haha. Nice one.

All I'm saying is that if you aren't actively trying to reduce your taxation costs, within the law, you are crazy.

..youre kidding right? There was absolutley no abuse in that comment.

I agree. It did not need to be removed.

It was a Godwin's Law violation if my memory is correct.

Exactly.

My comment was ridiculing that phenomenon.

Seems like the Stasi are censoring things again.

I had not learnt anything new today...up until now! Thank you.

They're not innocent, they voted for the flawed government policy.

[ Not acceptable. Personal abuse removed. Ed ]

[ Not acceptable. Personal abuse removed . Ed]

up
19

Hey Ed, please stop removing all the personal abuse - that's the stuff we enjoy reading :-)

Exactly - once there is abuse or some fool uses the word "Troll" you know you have won the discussion.

This is sucking all the fun out of Friday Fight Club.

You're a funpire, Mr Chaston.

[ Not acceptable. Personal abuse removed . Ed]

up
10

you got my point it is an unlevel playing field compared to other forms of investment. why should houses be treated differently, maybe when I see MPs at the trough you can see why they pass these laws to enrich themselves.
Plenty of business owners and other investors would love to claim losses against personal income

I think you'll find that when politicians (Labour) tried to introduce this in the last election they were eviscerated. The people have spoken and they said they want to incentivise investing in non-productive assets where the majority of profits get shipped off overseas. Can't go wrong!

As far as I'm aware any business that is run via a LTC is capable of passing losses through to the owner. You can also claim losses against personal income for taxable business operations that you run under your own name (as opposed to a business) if I'm not mistaken.

residential real estate is already treated the same as any other business asset ( with the major exception being that you can't depreciate the house on the land).

Pretty hard to claim losses against personal income when you work in the business and pay yourself via drawings. Singular limited liability trough theory.

Speculators on the whole are part timers with real jobs as well. Because they are risk averse (or they think they are) most will be waged paying PAYE. One nose but multiple sole trader trough theory.

If you own multiple businesses you could offset the losses from one against your personal income from the other. If you make PAYE and have a business on the side (such as importing products for sale via trademe) you can offset your business losses against your PAYE income.

If your LTC business makes a loss this year but will make a profit next year you can save up that loss to have it applied against your personal income next year.

Yes but a) I have to run my business at a profit otherwise I go bankrupt and I pay tax on that profit. b) my employees and I pay PAYE c) I export overseas bringing money into the country. d) If I sell my company I'll have to pay tax on that to. All of which contribute to the running of the country, does your house do that?

It requires maintenance which generate jobs within the country, it offers a place of residence in a desirable location which reduces the commute time of your staff relative to if they elected a cheaper house further from the city.

It also has the potential to be run as a book a batch if conventional rental becomes uneconomic. As a book a batch it would be a part of our tourism industry which brings money in via foreign tourists.

Someone told me that there are about 50 families seeking accommodation in Ralagan who can't get any even though there are about 200 book a batch type properties in the area. By electing to rent long term I help avoid these situations. (Having said that, if the people of NZ are dead set on rentals being converted to book a batch / air bnb type accommodation I'll gladly comply.)

Unforeseen consequences of technology? Book a Batch etc making it viable to not rent properties full time, thus many second homes purchased are being removed from the rental pool. ie Taupo and i guess Raglan..maybe Rotorua soon too??

Another - Is Uber making congestion worse as more and more drive around looking for a customer?

http://www.streetsblog.org/2015/07/22/ubers-own-data-reveals-it-slows-ma...

Never assume.

up
14

If the purpose of buying the property is capital gain it's taxable. Anybody who is negatively geared clearly has an intention of capital gain and should be taxed accordingly. Each and every one.

when a property is desirable it will cost more to buy and the rent may not cover outgoings...does not mean you are necessarily chasing capital gains...as you may just like the beachfront...vs garden view!

"For investors chasing better income returns, the indicative yields remain above 6% in Whakatane, Rotorua, Hastings, Wanganui, parts of Taranaki, Palmerston North, parts of the Hutt Valley, Blenheim, parts of Christchurch, Timaru, Ashburton, parts of Dunedin and Invercargill"

Only PN an 'parts of chch' have strong population growth expected out to 2043 (18-20% respectively).

Don't chase yields in small towns with declining population as eventually you'll have no one to rent too (same number houses, less people) that's why yields are so good. Wanganui and gisborne are classic examples, although many would be surprised at how poorly rotoruas and lower hutts population is predicted to be (flat at best out to 2043)

Correct but worth noting many investors are cash buyers so looking at bond yields and cash deposits as alternative places to get a return. Anyway we agree the property market is "fully valued" if not over valued however you look at it unless you expect rents to leap up which I can't see happening.

I saw 10% increases in rents over last 3 years over Palmy portfolio. During much of that time prices didn't move. Which made buying fantastic. Unfortunately prices are now roaring higher at 5% per quarter (20% per annum rate) but it's just catch up for 10 years of flat prices.

10 years ago prices similar, incomes and rents 20% plus lower, interest rates double! So a very very long way to go before prices are anywhere near being stretched in Palmy. A good 2-3 years of 20% gains is most likely what we will see, similar to the 2003-2007 period where Palmy prices doubled in 4 years.

Rotorua is exactly the same.

Sharetrader, you can purchase a property that is cashflow negative initially, but with time as inflation increases wage and rent levels properties become cashflow positive. I would say any property purchased more than 10 years previously, would now be cashflow positive. Many businesses lose money initially think Xero and other start ups. This is how the large money is made but need to hold for at least a decade. Similar to Buffett, high return on capital companies, large portion of profits reinvested, generating even further cashflow, reinvested and so on. But this system akin to investment in property (not speculation) does require patience and time to generate the big returns. Obviously at this stage if purchasing in Auckland, you could be waiting for a fair while for rent rises to convert properties to cashflow positive status.

I bought my house 6 years ago. It would have been negatively geared at the time but now it would be cash flow positive and returning nearly $12k a year or about 16.6% return on capital based on a 20% deposit. That is a good return regardless of capital gain. The property has also doubled in value so that's a bonus. The return is based on two key factors, lower interest rates and higher rents.

The intent is not clear (however I believe it would be the intent of many investors in that situation). The investor may be playing the long game and expecting rents to rise over time (not completely crazy). The investor might be expecting interest rates to drop further (optimistic but not completely crazy either). The investor might just be minimising losses until they are in a position to develop the land further or waiting for council rule changes. The investor might just be stupid (you can't fix that) and there is no law against being stupid and losing money.

ask the Donald...

Nah ST, its those damn dodgy tradespeople mate. They need watching like a hawk. ;-)

up
17

I will have no pity for the idiots who purchased property in Auckland at a 3-4%return banking purely on capital gains when they are forced to sell.

Me too , no sympathy , but I have even less sympathy for the Government that has allowed this to happen

haha..thanks for calling my Mum and half the readers on this website idiots...jury is out on who are the idiots in this discussion...i have a hunch ;-)

That Christchurch property, eh.
THE MAN must be beating the average by over 50% to be claiming his 10% gross rental yields.
Now, I don't know what the distributions are but I would hazard 10% is a couple of std. dists away from a 6-6.5% mean.

Im living in Christchurch and yes those yields are achievable in certain instances depending on the property type/locality. Sometimes you need to think outside the square. There is a certain type of property where investors are achieving 15%+ returns.

Obviously not achievable enough to influence the mean significantly, though..

The fact that the sales go through as 'non-market' probably has something to do with that.

Come on.
How many sales do you think go through as 'non-market'? I doubt it is is at all significant, relatively speaking.
Plus we would expect the distributions of yields to converge, anyway, regardless of market or non-market sale. Just because a house is sold privately, it doesn't mean that it demands a relatively higher or lower rental amount.

Think 'as is- where is'. And they are sold legitimately through RE agents. There has been plenty of these sales post EQ.

The trend has just followed the global bond markets. Worth noting the yields bottomed in August and have now risen 10%.

It would tend to suggest to me that property prices to everyone's relief should start to plateau.

Interesting you should say that - I notice that the latest Spark bonds that were issued only a month or so ago are now trading with a yield above the coupon rate i.e below par value so to speak.

up
10

Bank lending to speculators in existing property has been and continues to be crazy. It is reckless for bank to lend on the basis of assets which cannot by themselves support the lending.
If rental yield is 3.8%, and maintenance/insurance/rates cost only 1% of value, then for a 30 year loan and a 28% tax rate (assuming no negative gearing), then the maximum LVR that a bank should lend on is less than 40%.
That fact that are lending at LVRs far higher than this is why LVR limits have had to be imposed (and why the current limit of 60% needs to be lowered further), self regulation by banks is failing, the incentives by bank managers to lend recklessly at excessive LVRs are overwhelming, notwithstanding internal risk assessments, director attestations etc. etc.:- that is all useless in the face of managerial incentives to lend on risky loans.

By treating residential real estate as a risk-free asset, the banks have made it very, very dangerous.

Correct , as an ex-banker , I can honestly say it is reckless, and would not have happened 20 years ago , when we valued houses carefully , and checked income rigorously .

Hell ,some banks even checked if the applicant family wife was of child bearing age as a pregnancy could interrupt the mortgage payments of dual income families .

Ask any two year old what will happen to his/ her building blocks if he/ she keeps stacking them up on top of one another , relying on the bottom ones to sustain the top ones.

Our housing is like a an inverted pyramid which is unstable and can topple with the slightest gyration

Don't forget that it's also the rickety foundation of small business loans.

It is also the rickety foundation of savings deposit security

Excellent analogy!

I think this raises the issue of what type of valuation method banks should use.
There are three approaches to valuation:
1. Sales Comparison Approach
2. Income Capitalisation Approach
3. Cost Approach

The Sales Comparison approach dominates but perhaps banks should (via regulation or simply good practice for risk management) use the Income Capitalisation Approach (excluding consideration of sales comparisons)

The tax treatment incentives this behavior, and peoples greed makes it hard to resist. Election year next year. Vote to have this stopped, but id be surprised if any party has the stones to put up a policy that would unwind property's tax treatment.

I absolutely agree, and support yr suggestion, However, this incentive on speculators is enabled by the banks who lend above the LVR that the rental property can support on a standalone basis (above the prudent LVR). I call this lending reckless because of the risk on the entire system caused by lending above the prudent LVR.
The credit flow caused by investors refinancing and recycling their property price growth into additional purchases is much much greater than can be caused by owner occupiers: - this rocket fuel for credit explosion would be eliminated if banks lent responsibly by confining themselves to lending only up to a prudent LVR to investors.
If banks did so they would eliminate the opportunity for negative gearing.
Unfortunately, the internal risk assessments of banks will be managed and manipulated to ensure that they do not look arrive at such an inconvenient result, - and they certainly won't look at the wider system risks and damage caused by lending to "investors".

up
14

How to lose a General Election 101 ............. skew the playing field dramatically in favor of a minority group and see how the other group reacts

This tax break for negatively geared property investments is so perverse its just unbelievable .

The poor ( who are also mostly renters) pay tax from the first dollar they earn , but high net worth individuals are able to minimize their tax by claiming losses on residential properties they have bought as investments

Then the gains are tax free, which is okay , but the current set-up is like double dipping ( even if there is a clawback of some of it ) .

To add insult to injury , the poor family is likely to be receiving a rent subsidy , which goes directly the the PI , who can still deduct he negative gearing losses

The property investor has the best of both worlds , and I dont understand how it can be so skewed in favour of one group ?

And thats not a rhetorical question .......... I would like an answer

Its time Bill English stopped this nonsense , and RING -FENCED the losses , so they cannot be claimed as tax deductions .

For those lucky enough to be already feeding from the trough, the Govt must phase out the deductions over 5 consecutive tax years .

In fact the current set-up could even be described as TRIPLE DIPPING because in addition to the "losses" written offf AND the housing subsidy your tenant may get , the IRD does not charge use-of -money interest for these "loss deductions" so you get free use-of- money for years , even decades until you sell .

Brilliant .......... if you can get your nose into the trough in this feeding scheme !

Key will copy opposition policy if he has to. I'd imagine it wise to for opposition to keep some powder dry. Leaving it as late as possible in the electoral run up to announce such changes as you suggest. What benefit would it be to labour to get too clever this far out..... Just to see Key copy cat (but with watered down versions the msm ignore)?

I note the Treasury has looked at the taxation of investors but they noted:
"If funds are sourced domestically the over-deduction of interest (by rental property owners) will be balanced by over-taxation of the interest in the hands of the lender."
Well that is reassuring!

up
14

Memo to Ed. D.C
Am I permitted under your rules to complain about the abuse of having that rag flag still in the header many months after having rejected it in the referendum?

Awww c'mon mate , its a cool flag !

If you like a weetbix packet for a flag yer its pretty cool

Let the children have their symbol. 'Freedom of expression'

..I believe he will remove it once key has been kicked for touch. It's to remind us of all the dumb decisions (or lack of decisions) of our leader. Well thats how I look at it anyway.

Yep, its the tax treatment that needs changing.

Imagine what will happen when interest rates go up...

Symptoms of Mr Keys National Party and Housing Policy ...Suck-cess.

http://www.stuff.co.nz/national/85784840/raglan-rental-shortage-forces-f...

Isn't that just a sign that when long term rentials become uneconomic landlords switch to book a batch style rental models? If we remove interest deductibility on long term rentals Won't landlords just move to short term book a batch / air BnB / hotel models.

Nobody is going to book a Bach in Otara

A real estate agent told me it's going to be the Riviera of South Auckland.

Except the people who can't find rental homes to live in and discover that batches in Otara only cost 10% more than they would expect of a regular rental.

At least they would not be subsidised and might actually have to pay a bit of tax...if the IRD got its finger out.

All income should be taxed, or NONE. No deductions, allowed whatsoever....wage earners do not get that privilege..with their mortgages, expenses etc.

Fair is fair...when all is said and done. But probably not in our life time.

Investors = speculators

The above analysis shows that. Same risk and same returns. Auckland has the most speculators as they sell the most houses to investors.