Which area in New Zealand gives the best rental return?
In June this year, the Reserve Bank released official statistics for the first time showing that in May 2016 some 40% of all mortgage lending was on interest-only payment terms. This percentage has been “fairly stable” since the data was first available to the Reserve Bank in July last year.
“It reinforces what we said in last month’s property report where we stated that many investors appear to be looking for capital gain, rather than focused on rental yield,” says Vanessa Taylor.
For example, in Auckland where asking prices continue to rise, investors theoretically would receive 3.28% yield over a 12-month period – based on our calculation of average asking price vs weekly rental price, excluding all running/managing costs.
Waikato, Auckland and Wellington take up the bottom three spots below the national average, while regional areas dominate the higher returns. West Coast (8.44%), Wairarapa (6.01%) and Southland (5.93%) fill the top three spots across the nation.