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NZ vs OZ: What's better?

A comparison of residential house price yields across the Tasman has turned up interesting results, with both New Zealand and Australia showing they're good places to invest, but for different reasons.

Wednesday, July 2nd 2008, 12:00PM

by The Landlord

Crockers’ latest research data tracked median selling prices for homes in key cities of Australia and New Zealand between 2004 and 2008. Then they looked at median three-bedroom rentals to come up with estimated rental yield trends.

While they found rental yields have fallen by almost 21% in Auckland, they have been rising dramatically in Australia. Sydney experienced an increase of around 30% and Melbourne 16%. However, they still remain lower than in Auckland, where properties are now returning yields of 5.02%. All of the New Zealand cities offer yields of between 5% and 6%, whereas Australian cities are offering between 3% and 5% – except for Darwin. Darwin shows the top rate for all Australian cities with an estimated 6.07% yield.


However, yields must be balanced by a look at capital gains made during this period and these present another picture. Over the past four years, Sydney prices have remained almost static – in stark contrast to Auckland’s prices – which virtually doubled, gaining 44% in an uninterrupted climb.

Melbourne fared slightly better than Sydney with 15% growth. Greatest growth in Australia came from the boom time economies of Queensland and Western Australia in particular. In Darwin and Perth property prices almost doubled between 2004 and 2008. Brisbane showed a 50% increase and Canberra 28%.

Wellington, like Auckland, experienced consistently rising prices resulting in a 56% increase over the same period. Of the next cities, Christchurch, Adelaide and Hobart all show almost identical rising trends, as does Dunedin.

Crockers’ Karen Coleman says this research indicates the New Zealand property market overall looks pretty good as a place to invest.

“While Australian yields are low, you’ve got to remember they also have lower interest rates and you’ve got to factor that in. But the New Zealand property market continues to be a good investment option long term."



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Lender Flt 1yr 2yr 3yr
AIA 4.55 3.19 3.19 3.49
AIA Special - 2.69 2.69 2.99
ANZ 4.44 3.15 3.25 ▼3.39
ANZ Special - ▼2.55 ▼2.69 ▼2.79
ASB Bank 4.45 3.19 3.19 3.49
ASB Bank Special - 2.69 2.69 2.99
Bluestone ▼3.49 ▼3.49 ▼3.49 ▼3.49
BNZ - Classic - ▼2.55 2.69 2.99
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.25 3.29 3.59
Lender Flt 1yr 2yr 3yr
BNZ - TotalMoney 4.55 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union South 5.65 4.75 4.75 -
First Credit Union Special 5.85 3.35 3.85 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online - - - -
Heretaunga Building Society 4.99 4.35 4.45 -
HSBC Premier 4.49 2.60 2.65 2.80
Lender Flt 1yr 2yr 3yr
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 3.99 2.58 2.68 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.40 3.54 4.00
Kiwibank - Capped - - - -
Kiwibank - Offset - - - -
Kiwibank Special 3.40 2.65 2.79 3.25
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Lender Flt 1yr 2yr 3yr
Resimac 3.49 3.45 3.39 3.69
SBS Bank 4.54 3.29 3.19 3.49
SBS Bank Special - 2.79 2.69 2.99
The Co-operative Bank - Owner Occ 4.40 ▼2.69 ▼2.75 ▼2.99
The Co-operative Bank - Standard 4.40 ▼3.19 ▼3.25 ▼3.49
TSB Bank 5.34 ▼3.35 3.49 3.79
TSB Special 4.54 ▼2.55 2.69 2.99
Wairarapa Building Society 4.99 3.75 3.99 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.55 2.69 2.79
Median 4.55 3.19 3.22 3.39

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