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Residential property investors face declining yields in most parts of the country and a stagnant market in Auckland, declining market in Canterbury

Property
Residential property investors face declining yields in most parts of the country and a stagnant market in Auckland, declining market in Canterbury
23rd Jan 18, 10:52am by Greg Ninness

By Greg Ninness

Declining rental yields are once again the predominant feature of the rental housing market, as property prices rise faster than rents, according to interest.co.nz's Rental Yield Indicator.

The Indicator tracks the gross rental yields that would be achieved for three bedroom houses in 56 locations throughout the country where there is a high level of rental activity, if a house was purchased at the REINZ's lower quartile selling price over the previous six months, and rented out at the median rent for three bedroom houses in the same areas.

This allows an apples-with-apples comparison to be made of the underlying movements in gross rental yields throughout the country.

Of the 56 locations monitored by the Indicator, yields rose in 17, declined in 28 and stayed the same in 11. 

A property's yield is its annual rent expressed as a percentage of its purchase price.

Yields rise when rents rise faster than prices and fall when the reverse is true.

In the six months to December, the REINZ's lower quartile selling price for three bedroom houses rose in 40 of the areas monitored by the Indicator, and declined in 16, while rents were more subdued, rising in 29 areas, remaining unchanged in 23 and declining in four.

However there were significant regional differences.

In Auckland the market was mostly flat, with yields remaining unchanged in seven of the 10 suburbs monitored compared to the six months to September, while they rose in one suburb and declined in two.

On the price front, lower quartile prices rose in five suburbs and declined in five, while median rents were up three, down in two and unchanged in five.

In the Bay of Plenty prices tended to rise faster than rents, with yields falling in four areas and rising in two, while the reverse was true in the Waikato where yields rose in three districts, declined in one and were unchanged in one.

Of the other major centres, strongly rising prices were a feature of the market throughout the Wellington Region, which saw yields decline in six of the nine areas monitored, rise in two and remain unchanged in one.

Canterbury was the only major centre to show a declining market, with prices falling in Christchurch and Timaru and rents mostly flat throughout the region, which pushed up yields.

The Indicator shows investors should receive the best rental returns from properties at Flaxmere in Hastings, where the indicative yield was 9.8%, followed by Whanagnui at 8.9%.

The lowest yields were in the Auckland suburbs of Torbay, Avondale and Highland Park which were all on 3.6%.

Auckland was the only part of the country to have yields below 4%.

Use the horizontal and vertical scroll bars in the table below to see movements in yields in all 56 locations monitored by the Indicator since September 2014.

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.

  Indicative Rental Yields for the Six Months Ending:
Town/region Yield % Dec 2017 Yield % Sept 2017 Yield %
June 2017		 Yield % March 2017 Yield % Dec 2016 Yield % Sept 2016 Yield % June 2016 Yield % March 2016 Yield %
Dec 2015
Yield %
Sept 2015
Yield %
June 2015
Yield %
March 2015
Yield %
Dec 2014
Yield % 
Sept 2014
Whangarei:                            
Kamo/Tikipunga/Kensington 5.5 5.3 5.5 5.4 5.4 5.9 6.1 6.0 5.6 7.1 6.5 6.9 7.6
6.4
                           
 
Rodney - Orewa/Whangaparaoa 4.0 4.0 4.0 4.0 3.8 3.9 4.1 4.1 4.1 4.3 4.5 4.5 4.6
4.8
                           
 
North Shore:                          
 
Beach Haven/Birkdale 3.8 4.0 3.8 3.7 3.7 3.7 3.7 3.9 3.8 3.9 4.0 4.3 4.3
4.6
Torbay 3.6 3.6 3.6 3.7 3.6 3.4 3.6 3.8 3.6 3.8 4.0 4.5 4.6
4.5
                           
 
Waitakere:                          
 
Glen Eden 3.9 3.9 3.9 4.0 3.8 3.7 3.9 4.0 4.0 4.1 4.3 4.6 4.9
5.1
Massey/Royal Heights 3.9 3.9 3.8 4.0 3.9 3.8 4.1 4.1 4.0 4.1 4.4 4.6 4.9
5.1
Henderson 4.1 4.1 4.0 3.9 3.8 3.8 3.8 4.1 4.1 4.1 4.4 4.7 4.9
5.0
                           
 
Central Auckland:                          
 
Avondale 3.6 3.6 3.5 3.6 3.6 3.7 3.6 3.7 3.7 3.9 4.1 4.2 4.4
4.5
                           
 
Manukau:                          
 
Highland Park 3.6 3.8 3.6 3.5 3.5 3.4 3.3 3.3 3.6 3.6 3.8 3.8 4.1
4.3
Papakura/Drury/Karaka 4.7 4.7 4.3 4.3 4.4 4.4 4.7 4.8 4.8 4.9 5.5 5.6 5.9
6.0
Franklin - Pukekohe/Tuakau 4.7 4.8 4.8 4.6 4.4 4.3 4.5 4.9 5.0 5.0 5.3 5.5 5.6
5.6
                           
 
Hamilton:                          
 
Deanwell/Melville/Fitzroy 4.9 4.8 4.8 4.8 5.0 5.1 5.4 5.3 5.5 6.2 6.8 6.9 6.9
6.9
Fairfield/Fairview Downs 4.6 4.5 4.5 4.9 4.8 4.8 5.1 5.4 5.7 6.0 6.8 6.7 6.2
7.0
Te Kowhai/St Andrews/Queenswood 4.6 4.6 4.5 4.4 4.3 4.6 4.7 4.7 4.9 5.3 5.4 5.4 5.6
5.8
                           
 
Cambridge/Leamington 4.2 4.4 4.4 4.6 4.6 4.7 4.8 5.2 5.3 5.2 5.5 5.5 5.6
5.9
                             
Te Awamutu 5.1 5.0 5.1 5.0 5.1 5.2 5.2 5.7 6.2 6.3 6.5 6.2 6.3
6.4
                           
 
Tauranga:                          
 
Tauranga Central/Greerton 4.8 5.1 4.7 4.6 4.4 4.3 3.7 5.2 5.2 5.6 6.0 6.1 5.9
5.9
Bethlehem/Otumoetai 4.3 4.1 4.0 4.1 3.7 4.2 4.2 4.6 4.8 4.8 4.5 4.8 5.3
5.4
Mt Maunganui 4.2 4.3 4.4 4.4 4.2 4.2 4.4 4.8 4.6 4.7 5.4 5.7 5.6
5.2
Pyes Pa/Welcome Bay 4.6 4.7 4.3 4.8 4.8 4.9 4.8 5.4 5.5 5.3 5.9 5.7 5.7
5.8
Kaimai/Te Puke 5.5 5.0 4.9 5.3 5.4 5.5 5.6 5.8 5.9 6.2 6.4 6.2 6.2
5.7
                             
Whakatane 6.0 6.1 6.0 6.1 5.8 6.5 6.6 6.4 7.1 7.3 6.7 6.3 6.7
6.9
                             
Roturua:                            
Holdens Bay/Owhata/Ngapuna 7.4 9.3 10.5 8.0 9.7 10.7 9.4 8.7 8.3 8.7 n.a. n.a. n.a. n.a.
Kuirau/Hillcrest/Glenholm 4.9 5.6 5.5 4.9 7.3 7.5 6.4 5.9 6.3 6.6 n.a. n.a. n.a. n.a.
Ngongataha/Pleasant Heights/Koutu 7.6 8.5 6.2 8.6 8.2 7.2 7.9 7.7 8.0 8.2 n.a. n.a. n.a. n.a.
                             
Hastings - Flaxmere 9.8 9.9 9.3 8.9 8.6 9.4 9.3 10.9 11.5 11.0 12.1 12.2 11.7
11.8
                           
 
Napier - Taradale 4.4 4.4 4.9 5.0 4.9 5.1 5.5 5.4 5.6 5.5 5.3 6.2 6.3
6.1
                             
Taranaki:                            
New Plymouth Central/Moturoa 4.7 5.4 4.9 4.7 5.3 5.1 5.4 5.8 5.4 5.5 n.a. n.a. n.a. n.a.
Waitara/Inglewood 6.1 6.0 7.2 8.1 7.0 7.7 7.7 8.8 8.9 8.0 n.a. n.a. n.a. n.a.
                             
Whanganui 8.9 8.7 8.6 9.1 9.7 9.7 10.3 9.6 10.0 14.9 n.a. n.a. n.a. n.a.
                             
Palmerston North:                            
Kelvin Grove/Roslyn 6.5 6.3 6.5 6.6 6.6 7.0 7.3 7.4 7.2 7.2 n.a. n.a. n.a. n.a.
Palmerston North Central 4.9 5.5 6.0 5.9 5.6 6.5 6.3 5.6 5.5 6.2 n.a. n.a. n.a. n.a.
Takaro/Cloverlea/Milson 5.9 6.2 6.2 6.1 6.3 6.7 6.8 7.2 7.1 7.3 n.a. n.a. n.a. n.a.
                           
 
Kapiti Coast:                          
 
Paraparaumu/Raumati 5.0 5.0 4.9 4.8 5.3 5.6 5.7 5.9 6.0 6.1 6.2 6.1 6.1
5.9
Waikanae/Otaki 5.2 4.7 4.7 5.2 5.5 5.8 5.8 5.9 6.5 6.8 6.6 6.7 5.5
5.4
                           
 
Upper Hutt:                            
Heretaunga/Silverstream 5.0 5.4 4.7 4.7 4.6 5.3 5.6 5.8 5.8 6.1 n.a. n.a. n.a. n.a.
Totara Park/Maoribank/Te Marua 5.6 5.7 5.8 5.8 5.2 5.7 6.2 6.3 6.2 6.8 n.a. n.a. n.a. n.a.
                             
Lower Hutt:                            
Epuni/Avalon 4.5 4.8 4.9 5.1 5.6 5.1 5.5 5.8 5.2 5.1 n.a. n.a. n.a. n.a.
Taita/Naenae 5.9 5.5 5.6 5.8 6.1 6.2 6.5 6.8 6.9 7.1 n.a. n.a. n.a. n.a.
Wainuiomata 5.6 5.7 5.9 5.9 6.3 7.0 7.2 7.7 7.7 7.7 n.a. n.a. n.a. n.a.
                             
Wellington:                          
 
Johnsonville/Newlands 4.6 5.0 5.0 4.9 4.8 4.8 5.2 5.5 5.4 5.6 5.8 5.6 5.5
6.2
Vogeltown/Berhampore/Newtown 4.3 4.5 4.5 4.2 4.1 4.6 4.9 5.4 5.2 5.5 5.1 5.5 5.2
5.6
                           
 
Tasman:                          
 
Motueka 4.5 5.0 4.4 4.0 4.0 4.7 5.3 5.2 5.4 5.3 5.3 5.5 5.6
5.5
Richmond/Wakefield/Brightwater 4.6 4.8 4.6 4.7 4.6 4.8 5.3 5.3 5.3 5.5 5.6 5.6 5.8
5.9
                             
Nelson - Stoke/Nayland/Tahunanui 4.9 4.8 5.0 5.1 5.1 5.2 5.3 5.5 5.7 5.8 5.9 5.7 5.7
6.0
                             
Blenheim 5.5 5.7 5.6 5.8 6.3 6.5 6.5 7.0 7.0 6.4 6.5 6.5 6.6
6.5
                           
 
Christchurch:                          
 
Hornby/Islington/Hei Hei 5.8 5.6 5.6 5.6 5.7 6.1 6.1 6.0 6.0 6.2 6.2 6.3 6.5
6.3
Riccarton 5.7 5.1 4.7 5.0 5.2 5.5 5.0 5.7 5.0 4.9 5.9 5.2 4.9
5.1
Woolston/Opawa 6.7 6.2 6.0 6.2 6.5 6.6 7.4 6.3 6.4 6.6 6.8 7.3 7.2
8.0
                             
Ashburton 5.8 6.3 7.0 8.3 8.4 6.3 6.1 6.2 7.0 6.9 7.0 6.8 6.7
7.2
                           
 
Timaru 6.2 6.0 5.7 6.0 5.9 6.1 6.4 6.5 6.4 6.2 6.6 6.8 6.7
6.3
                           
 
Queenstown/Frankton/Arrowtown 4.3 4.4 4.6 4.3 4.1 4.5 4.3 4.6 5.2 5.0 4.8 4.9 4.7
5.3
                           
 
Dunedin:                            
Kenmure/Mornington 5.4 5.8 6.3 7.5 6.5 6.3 6.7 7.9 7.1 6.6 n.a. n.a. n.a. n.a.
Mosgiel 5.4 5.4 5.4 5.5 5.7 5.7 5.7 6.4 6.4 6.1 n.a. n.a. n.a. n.a.
South Dunedin/St Kilda 7.6 8.6 8.0 7.9 7.5 8.1 7.4 7.2 8.0 8.2 n.a. n.a. n.a. n.a.
                             
Invercargill 7.9 8.9 8.3 8.3 7.9 8.3 8.4 8.7 9.1 9.0 6.7 9.0 9.2
9.5

Source : 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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81 Comments

by  K.W.  |  23rd Jan 18, 11:24am 1516659860

I hope they took into account the costs of tenant damage, non payment of rent, and meth decontamination in that Flaxmere yield LOL

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by  Nzdan  |  23rd Jan 18, 2:51pm 1516672275

Conveniently it's gross yields, i'd imagine whatever the Landlord nets finds its way into a pokie machine anyway.

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by  gordon  |  23rd Jan 18, 11:35am 1516660541

I certainly am glad I did not take The Boy's advice to buy up rental properties in Christchurch. No wonder he is so angry these days and is particularly filthy on Labour. And it will get worse for him as rents continue to drop and values of properties in Christchurch adjust accordingly.

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by  printer8  |  23rd Jan 18, 11:40am 1516660859

I agree with the way in which yield has been calculated (i.e. lower quartile selling price vs average rent) in the absence of better data. The figures seem consistent in my location from my experience of owning rental properties.
A key point for property investors, the yields given do not include outgoings such as rates, insurance, maintenance, mortgage interest, missed rents, unoccupied periods, car running expenses, and time spent doing property checks, interviewing prospective tenants.
The raw yields provided are little better than bank term deposit rates and considering the expenses, investment in rental property is going to look very unattractive in comparison to term deposits.
So why do landlords have the label of being greedy fat cats??
The signals from the Government is that it is only going to be tougher for landlords, and sadly these seem based on a bias of greedy fat cats landlords who can afford it.

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by  Pragmatist  |  15th Dec 19, 10:55pm 1576403721

.

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by  mfd  |  23rd Jan 18, 12:23pm 1516663412

I think the targeting of landlords is all part of the package of trying to bring house prices down, which will make the country a better, more competitive place to live. It will also have the effect of making property investment more attractive as the yield becomes more reasonable in currently overpriced regions.

Very few people hate all landlords, but there seems to be a widespread recognition that investment from this country is massively skewed towards property rather than supporting productive businesses, which makes us all poorer in the long run.

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by  Gummy Bear Hero  |  23rd Jan 18, 4:36pm 1516678578

... according to Hugh Pavletich in his co-authored " Demographia " , as of 2017 , only Hong Kong and Australia had housing markets more overpriced than New Zealand !

I don't hate landlords ...

... I hate the dum-dums in local councils who stymie property development , and the daft buggers in parliament who sit on their hands , not seeing any problem , as house prices rise into the stratosphere & beyond ...

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by  Houses Overpriced  |  23rd Jan 18, 11:46am 1516661165

once kiwibuild kicks into effect, hopefully falling house prices and rents :)

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by  THE MAN 2  |  23rd Jan 18, 12:28pm 1516663688

Gordon, “The Man”is doing more than fine, but thank you for your concern.
If you knew anything about investing you would be in boots and all in Chch at the moment as returns are positively geared.
Our returns on purchase price still averages around 9 to 10per cent and our interest bill is also dropping so it is all good!
Challenge still there Gordon!

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by  BadRobot  |  23rd Jan 18, 2:22pm 1516670575

So you say - but first you have to be positively geared.

Your response to anything seems to be to challenge people - pistols at dawn?

Perhaps you would like to take up my challenge and provide some actual practical advice that will improve my financial situation - anything, something. Otherwise you just come across as nothing but a fraud.

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by  gordon  |  23rd Jan 18, 4:33pm 1516678398

He cannot give you any advice as he only invests in Christchurch where house prices and rents are falling. You would not be so silly to follow his footsteps.Oh to be diversified.

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by  THE MAN 2  |  23rd Jan 18, 7:17pm 1516688244

Give advice?
What the heck do you want me to say?
Buy property at under market value with future potential.
Sorry but I am not prepared to advise how I always buy right for obvious reasons.
Use leveraging on your positively geared property and you will achieve a sufficient income.
Manage your properties yourself and maintain them and you will always be able to tenant them.
Very rarely do we ever have a property untenanted and if so it is only for a week at the most.
As you say you don’t need to be that bright to be a landlord and that is the beauty of it but then the ones that haven’t been active in the market haven’t been that bright anyway!

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by  Retired-Poppy  |  23rd Jan 18, 5:51pm 1516683095

THE MAN 2, "you don't have to be that bright to be a Landlord"

Would you describe yourself as the brightest light in street or all foam and no beer??????

If you need help answering the question please feel free to ask.

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by  Yvil  |  23rd Jan 18, 5:50pm 1516683013

The Man's full quote is: "AS YOU SAY, you don’t need to be that bright to be a landlord"

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by  THE MAN 2  |  23rd Jan 18, 7:22pm 1516688558

Don’t care how anyone describes “The Man”, All foam no beer is totally irrelevant to being successful and financially independent.

Working in a JOB is totally overrated and when you have a investment vehicle that is gilt edged and gives you a lifestyle that others are envious of, we must be doing something right!

The reality is that most people could have been successful as well but choose not to do anything to improve their position and prefer to just moan about all of life’s injustices!

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by  blue meanie  |  23rd Jan 18, 7:54pm 1516690488

Yip, nothing like bludging money off hard working Kiwis... you I do not envy, like I don’t envy the lives of drug dealers and car thieves!

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by  THE MAN 2  |  23rd Jan 18, 9:58pm 1516697884

Providing shelter to people that want or need to rent is certainly not blushing money off Kiwis.
There are many investors especially Auckland that need to prop up the cost of owning a rental property, so on that basis who is actually budging?????

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by  NorthernLights  |  24th Jan 18, 6:28am 1516728502

The Man ? (Who calls themselves that ! )
When I was a Kiwi landlord I relied on the state welfare payments received by my various tenants
No taxpayer funding to my tenants meant no mortgages paid by my company
That’s how much of the Auckland rental market has been for decades
Private landlords however do provide a service to the community by providing said housing to state beneficiaries However the fact remains welfare payments prop up a lot of Auckland rental portfolios

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by  Nzdan  |  24th Jan 18, 7:11am 1516731079

What costs? Are you suggesting that all the properties are negatively geared?

Have you surveyed renters for their opinion or are you just speaking to your own narrative on their behalf?

TM2: landlords provide a service to those who do not wish to buy
Renters: well actually we’d love to buy if house prices weren’t so ridiculous
TM2: no you don’t, you’re happy renting

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by  Retired-Poppy  |  23rd Jan 18, 8:05pm 1516691132

THE MAN 2, "The reality is that most people could have been successful as well but choose not to do anything to improve their position and prefer to just moan about all of life’s injustices!"

But interest.co.nz is littered with your moans about our great Government doing you a great injustice. This same Government is actually keeping to its promises - yes they really are!. Ask the students, foreign speculators, low paid workers, tenants and of course Landlords. All promises kept - tick.

I'm sure there is a way for "THE MAN" to prosper under a Labour Government.

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by  BadRobot  |  23rd Jan 18, 8:55pm 1516694154

Yes RP I know he moans about perceived injustices and deceit by the government but if he has to admit anything about the current government he will not be able to play the "victim" card and engage in outrage porn.

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by  THE MAN 2  |  23rd Jan 18, 10:00pm 1516698006

RP, my so called moans are truths that should be taken onboard.
The attempt to hammer landlords will backfire on this coalition and tenants will be worse off for this action!

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by  Independent_Observer  |  24th Jan 18, 8:26am 1516735567

TM2 - do you understand the concept of paradigms and that everyone's 'truth' doesn't equate to reality? The only way to find the real truth is to look beyond your own paradigm (not easily done) - if you're wearing rose coloured glasses, what do you see? If you take the glasses off, then what do you see?

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by  rastus1  |  24th Jan 18, 1:20pm 1516753218

...the 'worse off tenants' will become first home buyers....once the coalition govt get stuck into the landlord bias tax laws that have distorted their ability to compete.

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by  NorthernLights  |  24th Jan 18, 6:30am 1516728641

Oh Dear ! The Man
Please don’t equate having a simple rental portfolio with great life achievement! Absurd!

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by  gordon  |  23rd Jan 18, 9:34pm 1516696488

For someone who is supposedly successful you sure do moan a lot about the Labour Government The Boy. We can all smell the fear on your breath. Not only is the Christchurch housing market going backwards as a result of the town itself going backwards but your rents are dropping. You are now the 17th highest place in New Zealand house price wise and likely to go even further down the list as time goes by. I have never known anyone to be so bitter about a change of government which really does indicate that you are in a truly precarious position fiscally. If you were in a comfortable financial position a change of government would have no affect on you. As for the unbelievably stupid comment you made about Jacinda being deceitful over her pregnancy. You certainly did yourself no favours on this site with that comment. I did not vote for Labour but I am losing no sleep about them being in power. In fact I believe they will make NZ a more equal playing field than National ever did. You have made the mistake of putting all your eggs in the wrong market. As you have admitted you are not that bright. When things do not go your way you get angry and you moan a lot. I suggest you educate yourself so you are fiscally more astute and diversified. Get rid of some of your rubbish in Christchurch and get yourself some decent investments. Then you will have less to moan and groan about.

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by  THE MAN 2  |  23rd Jan 18, 10:06pm 1516698365

Gordon, you really are hilarious!
I sleep very well and financial position is not a worry and my Bank Business Manager tells me that I am his safest customer, so that says something!
As I have said before we have got a large financial portfolio but not from my investing!
Why would I need to sell any property in Chch as they are all returning positive returns and I don’t beleive that the Chch. market is dropping at all, pretty flat but that is the way I like it as there will be no crash!
Take up my offer Gordon, please!

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by  Independent_Observer  |  24th Jan 18, 8:29am 1516735754

'My Bank Business Manager tells me that I am his safest cutomer'.....me oh my.....

Why would they possibly say that? (and how qualitifed would your bank business manager be to make such statements, given bankers past inability to determine what safe lending is?)

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by  Retired-Poppy  |  24th Jan 18, 8:55am 1516737347

TM2; "Am I your safest customer?" (now repeat ten times)

Business Bank Manager, "YES-YES-YES - now can I please have my lunch break in peace?"

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by  Kakapo  |  24th Jan 18, 8:58am 1516737518

Bank manager could save a lot of time by having a big jar of lollipops on the desk, and letting TM2 pick what colour he wants.

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by  bilbo  |  24th Jan 18, 1:36pm 1516754163

He still wouldn't be happy. Last I checked lollipops come in flavours like green apple and red raspberry but there is no blue one.

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by  Kakapo  |  24th Jan 18, 5:06pm 1516766809

Tanty time!

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by  gordon  |  24th Jan 18, 11:31am 1516746660

"My Bank Manager tells me that I am his safest customer." The Boy that is just about as stupid as what you said recently about Jacinda. I have been dealing with Bank Managers for 35 years and know that not one of them would say that to any client. The fact that you have assets and loans secured by them means you are not a safe bet. The fact that those assets are in Christchurch puts an even higher risk on you as we all know that Christchurch suffers from a high risk of another substantial natural disaster. Your risk would reduce somewhat if you had rentals out of Christchurch but we all know that is not the case. As you have admitted you do not have to be bright to be a residential landlord.

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by  bilbo  |  24th Jan 18, 12:48pm 1516751316

"my Bank Business Manager tells me that I am his safest customer... he's such a good guy, he even has a nick name for me at the Bank, he calls me the gold mine... haha what a good friend he is!".

What he means is you're *his* safest customer, you'll keep coming back for more loans no matter how bad a deal the chch market is.

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by  swapacrate  |  23rd Jan 18, 10:09pm 1516698544

Im sure I read that you thought, this site was for people to share knowledge on how they have become successful, so people can take advice and maybe listen.

If thats not true then this site is basically for some people to brag and rant. Whatever floats your boat, but if you do mention again that its for sharing knowledge and not provide that knowledge then your just as bad as Jacinder that you ranted against.

My money is in a scalable idea, not sure if its going to work but its a lot different then property. But if I ever have the luck of being successful, I will love to share my knowledge and help people out. Its a struggle and I would like to help people shortcut some of the pain. Plus I love NZers doing well, especially if its a scalable global idea.

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by  notaneconomist  |  24th Jan 18, 10:45am 1516743934

I think there is an issue with published data from Christchurch........the data is on the whole not reflective of what is happening on the ground.

There are a large number of homes that have been fully settled and paid out by insurers that have become rentals while the owners have built elsewhere with their insurance settlement money. Land prices both inside the city boundary and outside the boundary in areas like Selwyn have risen.
The cost of building has risen significantly also.....complying with the building codes is an expensive business and prices per square metre are now generally in excess of $3000 square metre.

Selling "As Is Where Is" is the main contributor to price data distortions.
Loads of people are renting out property that has been fully paid out by insurers. Anything newly built is renting for a premium......anything unrepaired is mainly but not always getting a slight discount depending on location.

The data collated doesn't reflect the unique conditions that are within the Canterbury earthquake area.

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by  Kakapo  |  23rd Jan 18, 12:27pm 1516663654

So, who saw Mike Hoskings' latest outpouring of idiotic drivel? I feel this steaming pile is a new personal best in the field of mindboggling illogic and blatant propaganda that only a complete moron would be convinced by. Well done, Mike!

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by  Ex Expat  |  23rd Jan 18, 12:43pm 1516664614

I didn’t until you pointed it out. What’s the problem with it? He’s saying the regional prices going up is a sign of success because it’s driven by demand from people wanting to live there. What do you expect when there is an excess of demand over supply?

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by  Retired-Poppy  |  23rd Jan 18, 1:16pm 1516666590

Ex Expat, excess of demand over supply, nah, I think you just tried to purify it. Its more like an excess of greed over actual need. Its people's inability to diversify away from "one way bet" property. Even you would agree the wealth gap could be precursor for social instability in your neighbourhood!

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by  Ex Expat  |  23rd Jan 18, 2:26pm 1516670798

I think you read into Hoskings article what you wanted to. He simply wrote that prices go up when people migrate to an area.

As for security, when you have lived with locked 'rape' gates on internal passages to bedrooms each night to protect your family, as I have in other countries, you have a heightened sense of security. I feel absolutely no anxiety in the Eastern Bays. It might be different in your area. Crims do tend to do their dirty work close to home.

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by  NorthernLights  |  23rd Jan 18, 5:08pm 1516680488

Rape gates ExPatty ?
Even in Singapore in the 1980s there were urine sensors in the building lifts to deter urination in them & yet Singaporeans appears in The Straits Times after being caught when the lift shut down on them
Rapes in Malaysia were a common occurrence but not Singapore
Pakistan another story as far as rape is concerned
arab countries ditto
Was in Jamaica recently & although media reports state otherwise there are no problems
Brazil is beautiful & yet media reports kidnaping
Philippines same
Murder & rape is pretty high per capita in Auckland now
and certainly safety deteriorated since the 60s.

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by  Ex Expat  |  23rd Jan 18, 4:49pm 1516679340

North Asia. Kept $200 in USD cash to pay invaders if they got nasty and tried to set a fire through the gate bars.

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by  NorthernLights  |  23rd Jan 18, 5:09pm 1516680593

ExPat point taken I get it

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by  Pragmatist  |  15th Dec 19, 10:56pm 1576403765

.

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by  Retired-Poppy  |  23rd Jan 18, 4:47pm 1516679242

Ex Expat, how well do you know your neighbours in Dreamsville aside from what they are worth? Organised crime comes in many forms and nationalities and is well established in your neighborhood too. If you feel so safe, then don't set your alarm, leave your garage wide open and leave your house unlocked when you exit.

It's never in your neighbourhood lol!

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by  Ex Expat  |  23rd Jan 18, 5:12pm 1516680720

According to the Herald stats there are 3.56 burglaries per month in Kohi East. I sleep well at night, however given not everyone votes National in Tamaki, I do lock the doors and garage. I also deadhead the poppies in the wild flower garden just in case the Greens look over the fence.

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by  Retired-Poppy  |  23rd Jan 18, 5:34pm 1516682097

Stats aside, how well do you know your neighbours - simple question. I know all my neighbours personally and we all look out for each other without being invasive - its nice. No, it's not a retirement village, its middle class suburbia.

It's more about people looking out after each other not looking to compare with each other - right? If that makes your skin crawl then it's okay for you to live next door to dodgy neighbours in Eastern suburbs. As they say, keep your enemies closer and they might protect your place too ;-)

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by  Ex Expat  |  23rd Jan 18, 6:36pm 1516685792

You make a lot of assumptions. We know all of our neighbours. All owner occupiers of over five years, one has been here 35 years, another for 28. We put out the bins for each other. Know the alarm codes. Have Christmas drinks and watch out who’s around the area.

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by  RickStrauss  |  23rd Jan 18, 9:59pm 1516697984

Sounds like some untapped market potential there in Kohi, eh.

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by  NorthernLights  |  24th Jan 18, 6:06am 1516727177

Yes Rick the up & comers of capitalism with cosy vocational status
That’s new Kohi 2018
When I read the one upmanship here from the spruiking class it reminds me why I’m free living in a vastly faster paced society but without so much of the unmerited pretentiousness that pervades Auckland

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by  Andrewj  |  23rd Jan 18, 1:15pm 1516666511

Like bitcoin

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by  rastus1  |  23rd Jan 18, 2:01pm 1516669308

...higher prices a sign of success. Good grief. The dumbing down is complete. Lets pay more for the same thing on the same salary........ donkey economics 101.

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by  Retired-Poppy  |  23rd Jan 18, 2:24pm 1516670671

rastus, higher prices are a sign of success - until the day it all collapses. In the rear vision mirror its labelled a failure that apparently no-one saw coming.

Mike Hosking and rastus - (slow clap)

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by  Dale Smith  |  23rd Jan 18, 1:21pm 1516666902

Prices going up in the regions only shows that the same dysfunctional housing policies that make Auckland what it is, are nationwide. IE it is not a size thing, it is a policy thing.

Every town in NZ is just an Auckland cluster$&%@ waiting to happen.

Up until the late 80's even Auckland had strong growth and the medium multiple was around 3x income, and there are numerous examples in other jurisdictions that show that strong growth does not equate with a large increase in house prices.

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by  NorthernLights  |  23rd Jan 18, 4:39pm 1516678749

Good point Dale
Former owner of a Devonport Realty company told me when he started in 1976 you could buy a nice Devonport weatherboard Villa for NZ$ 26,000
By comparison for NZ$26,500 in 1976 you could buy a nice brand new home brick unit in Te Atatu Sth West Auckland & buy a 3 bedroom brick house on 1/3rd acre in Henderson West Auckland for $26,000
Quality of life was far superior in Auckland in 1976 with families being together at weekends albeit booze was a problem with the licensing trust large taverns with car huge parks !
What can you say of Auckland today ?

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by  two otherguys  |  23rd Jan 18, 4:52pm 1516679565

What needs to be remembered is that in the 1970's the Devonport Council was up to its eyeballs in debt over the Ngataringa Bay court case, council rates went up to $3000 per annum while most other suburbs were paying rates of less than $500 pa. The elderly were gazumped. There was an exodus of peoples out of Devonport, nobody was interested in moving there. The place was a dead albatross.

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by  NorthernLights  |  23rd Jan 18, 5:28pm 1516681710
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by  Snodgrass Thro…  |  23rd Jan 18, 8:36pm 1516692993

The Devonport Borough Council had to pay compensation of $150,000 to the would be developers of the Ngataringa Bay marina. The cost per household was about $80.

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by  NorthernLights  |  24th Jan 18, 6:12am 1516727576

Thanks Snodgrass
There’s a gulf between $3000 a year rates & an extra $80
I nearly bought a house in Cheltenham Devo in ‘96 for 600K
Sadly the abominable Lake Rd traffic brought me to sanity

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by  waymad  |  23rd Jan 18, 4:40pm 1516678810

Not Christchurch (greater area), Dale.

Here, we have ourselves a real-life test of the proposition that ditching stupidly restrictive land-use policies and generally freeing up Supply, keeps prices stable.

Plot prices start with a 1, house plus plot is high 3's/low 4's.

But it took an earthquake sequence, a benevolent dictator (in this respect...) and emergency legislation (the LURP) which effectively, to judge by the practices since, threw the zoning plans under the bus, to achieve that.

Not a repeatable sequence for other localities......

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by  Dale Smith  |  23rd Jan 18, 9:08pm 1516694886

It's a shame it takes a couple of natural disasters to get people off their arse, and thank goodness for the greater area of Selwyn and Waimak, not CCC itself or the four avenues development lock down due to Central Govt. artificially holding land prices up, and now CCC are having to offer incentives (ie other ratepayers who cannot do what these developers can have to pay for it) within this area to get development started.

And yes large numbers of new homes were rebuilt or repaired but to the old standard, missing a golden opportunity to build to a better standard.

Not only are NZ houses still unaffordable by international comparison, but they are build to a low standard as well.

All CHCH is showing is the counter cyclical wave (supply still increases while demand drops) that happens in dysfunctional housing market, not the true co wave that happens when supply and demand are in sync with each other.

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by  NorthernLights  |  24th Jan 18, 6:21am 1516728107

Dale
Absolutely agree that NZs house construction costs need addressing
At every input there’s opportunities to improve affordability yet governments of both persuasions never adequately address the situation
It’s almost like governments have a vested interest in keeping the status quo & inject foreign money into the inequitable housing equation

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by  Camel's back  |  23rd Jan 18, 1:25pm 1516667130

A sign of success is... rising quality of life, improved education and health outcomes, better job opportunities and happy communities.. Not demand driving up house prices beyond the reach of locals, that is failure.

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by  PocketAces  |  24th Jan 18, 6:26am 1516728367

100% dead right, and a clear indication that what is going on is the exact opposite of success, in real terms. We need a monumental shake up, I don't know if there is a politician alive here who has the guts to do it.

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by  Zachary Smith  |  24th Jan 18, 8:31am 1516735917

Unfortunately your "monumental shakeup" would be Marxist/SJW nonsense through and through so we must resist it with everything we have got.

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by  Ex Expat  |  24th Jan 18, 8:48am 1516736886

Why does it need a politician? There is nothing holding back anyone from voluntarily selling their home to a buyer based on factors other than price. Similarly, make a donation to the Government coffers above that required if you think you should pay more tax; the account number is publically available 03 0049 0001100 27. If every voter for the current government did that, the problem would be solved.

The above is all tongue in cheek as I know the reality is that Leftie politics is all about forcing other people to pay, which tends to make those with the money vote for a party that wont rifle through their pockets. Stale mate.

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by  Houseworks  |  23rd Jan 18, 12:38pm 1516664304

Yields are falling but cashflow income is rising. Rental property is a good place to be right now imo

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by  J.C.  |  23rd Jan 18, 1:02pm 1516665772

Relatively speaking, rental returns are no better than 6-month term deposits in terms of ROI, but the compounding effect may mean you are slight benefit off with term deposits. "Cashflow income" is rent, which is probably rising at a rate which provides an extra round of happy meals at MxDs for the family each month.

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by  Bobster  |  24th Jan 18, 11:02am 1516744939

At current gross yields your net return on equity (that's actual current equity, not your initial equity) is close to zero. If you compared it to the risk free rate of return your net yield is probably negative. At these current sad yields, especially in Auckland, no one is making real money from yields. investors are wholly dependant on capital gains into infinity to make money over the risk free rate. Looks to me like you are picking up pennies in front of a leverage steamroller. Good luck with that.

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by  Eco Bird  |  23rd Jan 18, 1:33pm 1516667615

In my view, this is Misleading information based on the worst case scenarios ... Yield is property specific not some general quartile figures and percentages ....
" if a house was purchased at the REINZ's lower quartile selling price over the previous six months, and rented out at the median rent for three bedroom houses in the same areas." !!! ... So , what is the percentage of these cases to the total rental properties in any given area ??....

Investors who bought rentals just 3 year ago have seen their yields growing every year while paying almost the same amount in interest on the loan ( which is the major expense and Interest rates have little changed since and almost all are on fixed interest only loans) - appreciating house values on paper does not mean that landlords recalculate the yield every month or quarter !!
Rents go up by at least 3-4% annually or adjusted to market prices when re-rented ..

Steady yields in some Auckland suburbs is great news, It means that yields have grown by as much as these properties have appreciated in paper value .....

Afterall, Smart Investors do not buy willy nilly or purchase any property in the area .... and ... They bank Dollars - Not percentages !!

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by  Tim Depositor  |  23rd Jan 18, 1:59pm 1516669146

"... when the Bank of Japan finally signals a change to that policy, that’s when rates will finally move–and maybe very quickly."

https://www.forbes.com/sites/bryanrich/2018/01/22/the-bank-of-japan-wil…

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by  J.C.  |  23rd Jan 18, 3:18pm 1516673936

QE in Japan has finished according to some.

-- The Bank of Japan has been curtailing asset purchases for months.

-- This marks the end of the QE era that's seen accommodation from the BOJ, European Central Bank and Federal Reserve.

http://www.businessinsider.com/bank-of-japan-has-quietly-ended-its-easy…

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by  Double-GZ  |  23rd Jan 18, 8:52pm 1516693922

Professional house 'flipper' reveals his secrets - His last property sale earned him a tidy million-dollar profit, so it's safe to say when it comes to "flipping", Tom Hall knows his stuff
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=119…

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by  custard  |  23rd Jan 18, 11:30pm 1516703429

Go for it I say, and not wishing to be negative – I just read something about nothing happening unless you swing the bat, and I agree.

But it is sometimes interesting that your last deal is a compilation of all your previous deals past – ie, all the gains previously made are tucked into the last – and this is sometimes, but obviously not always, the undoing of some.

CNN had various articles like these in the early to mid-2000’s – and then the articles stopped.

You were clearly the genius, and obviously had something over all the other boats that rose with the tide – until the tide went out – and you weren’t a genius, but simply a victim of the times.

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by  Conrad  |  24th Jan 18, 12:31pm 1516750303

"Melbourne made made some money" hardly seems a particularly gripping story for the Herald to run.

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by  Bluff  |  23rd Jan 18, 10:32pm 1516699964

Commercial property yields have been rubbish due to land value increases outstripping lease values. So the commercial property gentry along with the sales agent industry have embarked on a readjustment of yields and driven up commercial lease rates. Problem is, if productivity is stagnant where does the 5,10,20% lease increase come from? Asset bubbles in stocks, commercial & residential propery eventually leads
to inflationary pressure and the economic cycle moves onto its next phase.

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by  custard  |  23rd Jan 18, 11:22pm 1516702942

Speaking of lease values, in the case of residential - look no further than Auckland's viaduct area for such nonsense.

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by  custard  |  23rd Jan 18, 10:48pm 1516700906

TM2 – always enjoy your enthusiastic and spirited comments – although clearly I disagree with some of those which are politically aligned – but such is democracy, and such is life.
There has been a suggestion recently of a “dislike” option.
If such an option was presented, I’m inclined to believe your representations would kindly be described as “heroic”.
However, I get the feeling that it would be of absolutely no concern whatsoever to you if there was a dislike or thumbs down option on this site.
Thankfully we are all free to follow chosen paths – and ultimately wish you well.

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by  CWBW  |  24th Jan 18, 10:39am 1516743540

Those who haven't bought into over priced junk be glad. Hang on tight, it's coming.

http://www.stuff.co.nz/business/world/100831022/It-is-frankly-scary-Wor…

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by  paper-net  |  24th Jan 18, 11:06am 1516745217

If you have a closer look at the absolute figures for weekly rentals of 1-bed properties in Auckland, roughly half have had a reasonable drop in price since Dec 2016. Any ideas why this might be?

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