|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Wednesday, May 18th, 12:16PM


Latest Headlines

The lure of the regions

Regional markets are beckoning investors as the Reserve Bank’s new LVRs start to hit home, but experts say there are risks that need to be considered.

Friday, November 4th 2016, 9:00AM

by Miriam Bell

According to’s October data, demand for Auckland property has fallen while demand for property in regional markets has soared.

And QV’s October data shows it is no longer the recent hotspots of Hamilton and Tauranga that are attracting attention.

QV valuers in both cities said the frenzied activity seen in those markets earlier this year has subsided to more subdued levels.

Instead buyer focus appears to have shifted further afield. CEO Brendon Skipper cited Palmerston North, which has long had a reputation for affordability, as the market of the moment.

QV national spokesperson Andrea Rush said investors shut out of more expensive markets were turning their sights to more affordable markets in relatively close proximity to North Island main centres.

Such markets included the Western Bay of Plenty, Whangarei, Rotorua and the Waikato District – all of which continue to see very strong value growth, she said.

Regional markets can offer investors not only more affordable prices, but much better rental yields.

However, as has reported in the past, there are risks that come with investing in regional markets – and investors need to be aware of them.

Property Ventures director Mark Honeybone said it is crucial to establish what the state of the town’s economy is.

“If industries are shutting up and the commercial centre is not thriving it doesn’t bode well for the future. Before investing, you need to know if a town is going to be healthy and doing well down the track.”

To that end, it is necessary to find out what an area’s economic drivers are, whether there are plans for commercial and infrastructure investment going ahead, and what the council has planned.

Researching the town’s rental market thoroughly is also crucial, he said.

“But finding out what the average rent for the area is is only part of it.

“You want to know how easy it is to fill vacancies, what the tenants in the area are like and where they are employed, whether the rental market is driven by seasonal workers, and if gangs are a problem.”

There are a number of other issues which investors can easily overlook when it comes to investing in regional markets.

Honeybone said regional locations might be cheaper, but the expenses associated with rental properties will largely be the same as in major centres.

It was quite possible that an investor with a small property in a regional town could end up paying rates similar to those they would on a $1 million+ property in Auckland, he said.

“That could have a significant effect on yields. Investors must take into account such factors in the overall yield picture before jumping into a purchase.”

Honeybone, who has himself invested in regional markets in the past, said such investments can pay off.

“Just make sure you do comprehensive due diligence on a regional market before you commit to an investment and verify that those who you are talking to are trustworthy sources.”

Some commentators take a harsher view of regional markets.

Yesterday ANZ chief executive David Hisco said investors should be careful if buying in locations where properties were cheaper.

While BNZ chief economist Tony Alexander recently issued a staunch warning to investors to exercise caution when buying in the regions.

He said this was because many regional markets do not have strong population projections which means their future growth prospects are likely to be limited.

« Super City sales plummetFree Investment Property Showcase Events: Auckland, Wellington and Christchurch »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment



Printable version  


Email to a friend
News Bites
Latest Comments
  • Brian Gaynor dies
    “RIP - a true icon and such a humble person who helped so many....”
    2 days ago by p simone
  • Brian Gaynor dies
    “Very sad. Condolences to him family....”
    2 days ago by
  • Brian Gaynor dies
    “Brian was someone you would always go and listen to if he was presenting at a seminar or conference, someone you would always...”
    2 days ago by MikeBeuvink
  • Brian Gaynor dies
    “A true champion of the industry. My sincere condolences to family, colleagues and friends. ...”
    2 days ago by Pragmatic
  • [GRTV] AIA rolls out direct life insurance plans
    “Thanks Lifeadviser1, and it is great to see you have been having a play in the system. You are right, in the original...”
    2 days ago by Sam.Tremethick
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News


Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 5.35 4.49 5.25 5.55
ANZ 5.54 5.15 5.85 6.15
ANZ Blueprint to Build 2.78 - - -
ANZ Special - 4.55 5.25 5.55
ASB Bank 5.35 4.49 5.25 5.55
Avanti Finance 5.45 - - -
Basecorp Finance 6.45 - - -
Bluestone 5.29 7.49 7.59 -
BNZ - Classic - 4.55 5.25 5.45
BNZ - Mortgage One 5.55 - - -
BNZ - Rapid Repay 5.55 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 5.55 5.35 5.94 5.99
BNZ - TotalMoney 5.55 - - -
CFML Loans ▲6.45 - - -
China Construction Bank 5.50 5.40 6.14 6.40
China Construction Bank Special - 4.45 5.19 5.45
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 4.70 5.20 -
Heartland Bank - Online 4.00 3.85 4.70 4.84
Heretaunga Building Society 5.95 4.80 5.50 -
HSBC Premier 5.49 4.39 5.15 5.39
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.25 ▲4.29 ▲5.09 ▲5.35
Kainga Ora ▲5.43 ▲4.57 ▲5.58 ▲5.85
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 5.00 5.55 6.19 6.39
Kiwibank - Offset 5.00 - - -
Kiwibank Special 5.00 4.55 5.19 5.39
Liberty 4.84 - - -
Nelson Building Society 5.95 4.95 5.85 -
Pepper Essential 3.44 - - -
Resimac 4.59 5.60 6.16 6.29
Lender Flt 1yr 2yr 3yr
SBS Bank 5.29 4.69 5.35 5.49
SBS Bank Special - 4.19 4.85 4.99
Select Home Loans 4.09 4.29 4.86 5.09
The Co-operative Bank - First Home Special - ▲4.19 - -
The Co-operative Bank - Owner Occ 5.45 ▲4.29 5.19 5.45
The Co-operative Bank - Standard 5.45 ▲4.79 5.69 5.95
TSB Bank 5.59 ▼5.14 6.05 6.15
TSB Special 4.79 ▼4.34 5.25 5.35
Unity 5.65 ▲4.80 ▲5.50 -
Wairarapa Building Society 5.24 4.55 5.20 -
Westpac 5.54 5.09 5.79 6.09
Lender Flt 1yr 2yr 3yr
Westpac - Offset 5.54 - - -
Westpac Special - 4.49 5.19 5.49
Median 5.45 4.55 5.25 5.52

Last updated: 17 May 2022 10:54am

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