About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Friday, November 15th, 3:22PM
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
  • FMA fesses up to website breach and apologises
    “Correct quote from the Act but reporting is not mandatory as the wording used is "may" not must. Shanks comments have beenquoted...”
    7 hours ago by gavin austin adviser business compliance
  • When is a client really a client?
    “Agree Murray. Financial consideration has nothing to do with the new laws. Might I suggest that the government and the...”
    7 hours ago by JPHale
  • When is a client really a client?
    “I think anyone who thinks someone becomes their client only after that person has accepted an advice recommendation from...”
    21 hours ago by Murray Weatherston
  • When is a client really a client?
    “thanks regant, generally agree with you. not your fault that i didn't make myself clear enough. ...”
    23 hours ago by w k
  • Long-serving ACC investment chief calls it a day
    “I'm surprised that no-one has commented yet, but isn't it a little strange that their in-house equities strategy is following...”
    23 hours ago by smitty
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
ANZ 5.19 4.05 3.95 4.49
ANZ Special - 3.55 3.45 3.99
ASB Bank 5.20 4.05 3.95 4.39
ASB Bank Special - 3.55 3.45 3.89
BNZ - Classic - 3.55 3.45 3.99
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 6.15 4.95 4.95 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.35 3.35 3.35
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 4.04 3.95 4.39
Kiwibank 5.80 4.30 4.20 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.55 3.45 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime - - - -
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - ▼3.55 3.39 3.89
Sovereign 5.30 4.15 4.29 4.55
Sovereign Special - 3.65 3.75 4.05
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.35 4.25 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.55 3.45 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.55 3.45 3.99
Median 5.35 4.04 4.02 4.39

Last updated: 11 November 2019 4:01pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

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