tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, August 7th, 8:34PM

News

rss
Latest Headlines

Local factors driving yields: Report

Region-specific factors have an important role to play in the performance of rental yields, a new report says.

Wednesday, July 23rd 2014, 12:00AM

by The Landlord

ANZ’s economists have looked at yields across the country as part of their latest Property Focus report.

They have determined yields based on REINZ median dwelling sales price compared to tenancy bond data. The higher the yield, the lower the house price relative to the sum of rental payments.

The report looked at 12 regions over the past 20 years.

Nationwide, the value of a typical dwelling is currently equivalent to 22 years of rental payments,  compared to about 13 years in the early 1990s.

The declining trend in rental yields over the past 20 years had been evident to varying degrees in all regions, the report said. "This suggests a common nationwide element at play, with the falling trend in mortgage interset rates and the subsequent ability to take on morfe debt for the same level of income being the obvious candidate."

In all regions, increases in property values had outstripped rents by a considerable amount. Between the early 1990s and 2007, there was a general downward trend in yields and the spread between the regions became narrower.

But the report said the divergence had started to increase again over recent years.

“Our analysis suggests that more of the difference in trends has been attributable to different trends in property values rather than diverging growth in rents.”

Between 1992 and 2014, rents increased between 70% and 175% across the country, with the biggest increases in Taranaki, Central Otago and Canterbruy. Property prices increased between 142% and 425% over the same period, led by Central Otago and Auckland. “The growth in nationwide property values has been about double that of rents over the past year or so. Property values have increased faster than the nationwide average in various Auckland centres and parts of Canterbury. More sizeable rental increases have been predominant in Canterbury areas, with those in the various Auckland areas slightly below the nationwide average.”

The report found yields were highest in Otago and Southland and lowest in Auckland and Central Otago/Lakes.

Otago and Southland reported yields of about 6%, followed by Manawatu/Wanganui, with about 5.5%, then Hawkes Bay, Taranaki, Canterbury and Northland.

The ANZ economists said the data showed that rising prices in Auckland were not just the result of a supply shortage because a true shortage would drive up rents as well as sale prices.

Canterbury’s yields are much higher, at almost 5% compared to less than 4% in Auckland, indicating that a shortage was a driver there, they said.

 

 

« Healthy lifestyle property market: REINZWheeler's message could backfire: Economists »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 5.50 - - -
Lender Flt 1yr 2yr 3yr
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 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
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 ▼3.85 ▼3.95 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.55 2.65 2.79
Kainga Ora 4.43 3.29 3.39 3.85
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac ▼3.39 3.45 ▼2.99 ▼3.35
SBS Bank 4.54 ▼3.05 3.19 ▼3.25
Lender Flt 1yr 2yr 3yr
SBS Bank Special - ▼2.55 2.69 ▼2.75
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 ▼2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 ▼3.29
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 3.65 3.69 -
Westpac 4.59 4.15 4.09 4.49
Westpac - Offset 4.59 - - -
Westpac Special - 2.55 2.69 2.79
Median 4.55 3.10 3.19 3.12

Last updated: 7 August 2020 5:51pm

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com