Propertyscouts New Plymouth

Residential rental yields start to rise - 20th Jul 2018

Residential rental yields start to rise

The fundamentals for residential investment property are slowly improving as rents rise and property prices ease, according to interest.co.nz's Rental Yield Indicator.

Gross rental yields rose in 25 of the 56 locations throughout the country monitored by the Indicator compared to the six months to March, declined in 18 and were unchanged in 13. This is based on lower quartile selling prices and median rents for three bedroom houses in the six months to June.

The latest figures suggest the residential investment market is continuing to turn slowly, with capital gains drying up and rental returns becoming more important for investors.

The Indicator previously showed, in the six months to December last year, that gross yields rose in 17 of the 56 areas monitored, declined in 28 and were unchanged in 11, as rising property prices continued to outpace rents. But in the six months to March this year, yields were rising in more places than they were declining in, with rises in 25 locations, declines 21 and no change in 10.

These latest figures show that trend is strengthening, as yields decline in fewer locations, although the change is gradual and the yields remain at very low levels in most main centres.

A gross rental yield is a property's annual rent expressed as a percentage of its purchase price or capital value.

A higher yield indicates a higher return for investors and when yields are rising it suggests rents are rising relative to property prices, while falling yields suggest prices are rising relative to rents, reducing investor returns.

Since interest.co.nz started the Indicator in September 2014, yields have generally fallen as property prices surged, outpacing growth in rents.

But the latest figures suggest that trend bottomed out last year and has now started to turn.

However it may be some time before yields in places like Auckland start to look attractive again to investors.

In the six months to September 2014, the yields in the Auckland suburbs monitored by the Indicator ranged from 4.3% to 5.6% but in the six months to June this year they ranged from 3.6% to 4.7%.

In Hamilton they have declined from a range between 5.8% and 6.9%, to between 3.6% and 4.6% over the same period. Most locations show similar trends.

Of the 56 locations monitored by the Indicator, the lowest yield was in Highland Park in east Auckland on 3.6%, while the highest was Flaxmere in Hastings on 9.2%.

Four of the 10 suburbs in Auckland had yields below 4%, compared to six Auckland suburbs that had sub 4% yields in June last year.

 

Indicative gross rental yields for the six months ending:
Town/region Yield % June 2018

Yield %  March 2018

Yield %  Dec 2017 Yield % Sept 2017 Yield %
June 2017
Yield % March 2017 Yield %   Dec 2016 Yield %  Sept 2016 Yield % June 2016 Yield % March 2016 Yield %
Dec 2015

Yield %

Sept 2015

Yield %
June 2015

Yield %

March 2015

Yield %

Dec 2014

Yield % 

Sept 2014

Whangarei:                                
Kamo/Tikipunga/Kensington 5.5 5.4 5.5 5.3 5.5 5.4 5.4 5.9 6.1 6.0 5.6 7.1 6.5 6.9 7.6

6.4

                               

 

Rodney - Orewa/Whangaparaoa 4.0 4.0 4.0 4.0 4.0 4.0 3.8 3.9 4.1 4.1 4.1 4.3 4.5 4.5 4.6

4.8

                               

 

North Shore:                              

 

Beach Haven/Birkdale 3.9 3.8 3.8 4.0 3.8 3.7 3.7 3.7 3.7 3.9 3.8 3.9 4.0 4.3 4.3

4.6

Torbay 3.7 3.7 3.6 3.6 3.6 3.7 3.6 3.4 3.6 3.8 3.6 3.8 4.0 4.5 4.6

4.5

                               

 

Waitakere:                              

 

Glen Eden 3.9 3.8 3.9 3.9 3.9 4.0 3.8 3.7 3.9 4.0 4.0 4.1 4.3 4.6 4.9

5.1

Massey/Royal Heights 4.2 4.2 3.9 3.9 3.8 4.0 3.9 3.8 4.1 4.1 4.0 4.1 4.4 4.6 4.9

5.1

Henderson 4.1 4.2 4.1 4.1 4.0 3.9 3.8 3.8 3.8 4.1 4.1 4.1 4.4 4.7 4.9

5.0

                               

 

Central Auckland:                              

 

Avondale 4.0 3.7 3.6 3.6 3.5 3.6 3.6 3.7 3.6 3.7 3.7 3.9 4.1 4.2 4.4

4.5

                               

 

Manukau:                              

 

Highland Park 3.6 3.7 3.6 3.8 3.6 3.5 3.5 3.4 3.3 3.3 3.6 3.6 3.8 3.8 4.1

4.3

Papakura/Drury/Karaka 4.7 4.6 4.7 4.7 4.3 4.3 4.4 4.4 4.7 4.8 4.8 4.9 5.5 5.6 5.9

6.0

Franklin - Pukekohe/Tuakau 4.6 4.7 4.7 4.8 4.8 4.6 4.4 4.3 4.5 4.9 5.0 5.0 5.3 5.5 5.6

5.6

                               

 

Hamilton:                              

 

Deanwell/Melville/Fitzroy 5.1 5.1 4.9 4.8 4.8 4.8 5.0 5.1 5.4 5.3 5.5 6.2 6.8 6.9 6.9

6.9

Fairfield/Fairview Downs 4.7 4.6 4.6 4.5 4.5 4.9 4.8 4.8 5.1 5.4 5.7 6.0 6.8 6.7 6.2

7.0

Te Kowhai/St Andrews/Queenswood 4.7 4.7 4.6 4.6 4.5 4.4 4.3 4.6 4.7 4.7 4.9 5.3 5.4 5.4 5.6

5.8

                               

 

Cambridge/Leamington 4.6 4.3 4.2 4.4 4.4 4.6 4.6 4.7 4.8 5.2 5.3 5.2 5.5 5.5 5.6

5.9

                                 
Te Awamutu 5.0 4.9 5.1 5.0 5.1 5.0 5.1 5.2 5.2 5.7 6.2 6.3 6.5 6.2 6.3

6.4

                               

 

Tauranga:                              

 

Tauranga Central/Greerton 4.8 4.7 4.8 5.1 4.7 4.6 4.4 4.3 3.7 5.2 5.2 5.6 6.0 6.1 5.9

5.9

Bethlehem/Otumoetai 4.2 4.3 4.3 4.1 4.0 4.1 3.7 4.2 4.2 4.6 4.8 4.8 4.5 4.8 5.3

5.4

Mt Maunganui 4.6 4.4 4.2 4.3 4.4 4.4 4.2 4.2 4.4 4.8 4.6 4.7 5.4 5.7 5.6

5.2

Pyes Pa/Welcome Bay 4.6 4.4 4.6 4.7 4.3 4.8 4.8 4.9 4.8 5.4 5.5 5.3 5.9 5.7 5.7

5.8

Kaimai/Te Puke 4.8 4.9 5.5 5.0 4.9 5.3 5.4 5.5 5.6 5.8 5.9 6.2 6.4 6.2 6.2

5.7

                                 
Whakatane 6.1 6.3 6.0 6.1 6.0 6.1 5.8 6.5 6.6 6.4 7.1 7.3 6.7 6.3 6.7

6.9

                                 
Roturua:                                
Holdens Bay/Owhata/Ngapuna 7.8 7.8 7.4 9.3 10.5 8.0 9.7 10.7 9.4 8.7 8.3 8.7 n.a. n.a. n.a. n.a.
Kuirau/Hillcrest/Glenholm 5.4 5.8 4.9 5.6 5.5 4.9 7.3 7.5 6.4 5.9 6.3 6.6 n.a. n.a. n.a. n.a.
Ngongotaha/Pleasant Heights/Koutu 6.0 6.7 7.6 8.5 6.2 8.6 8.2 7.2 7.9 7.7 8.0 8.2 n.a. n.a. n.a. n.a.
                                 
Hastings - Flaxmere 9.2 9.6 9.8 9.9 9.3 8.9 8.6 9.4 9.3 10.9 11.5 11.0 12.1 12.2 11.7

11.8

                               

 

Napier - Taradale 4.7 4.6 4.4 4.4 4.9 5.0 4.9 5.1 5.5 5.4 5.6 5.5 5.3 6.2 6.3

6.1

                                 
Taranaki:                                
New Plymouth Central/Moturoa 4.8 4.6 4.7 5.4 4.9 4.7 5.3 5.1 5.4 5.8 5.4 5.5 n.a. n.a. n.a. n.a.
Waitara/Inglewood 6.5 6.4 6.1 6.0 7.2 8.1 7.0 7.7 7.7 8.8 8.9 8.0 n.a. n.a. n.a. n.a.
                                 
Whanganui 9.0 9.0 8.9 8.7 8.6 9.1 9.7 9.7 10.3 9.6 10.0 14.9 n.a. n.a. n.a. n.a.
                                 
Palmerston North:                                
Kelvin Grove/Roslyn 6.2 6.3 6.5 6.3 6.5 6.6 6.6 7.0 7.3 7.4 7.2 7.2 n.a. n.a. n.a. n.a.
Palmerston North Central 5.1 5.0 4.9 5.5 6.0 5.9 5.6 6.5 6.3 5.6 5.5 6.2 n.a. n.a. n.a. n.a.
Takaro/Cloverlea/Milson 6.1 6.0 5.9 6.2 6.2 6.1 6.3 6.7 6.8 7.2 7.1 7.3 n.a. n.a. n.a. n.a.
                               

 

Kapiti Coast:                              

 

Paraparaumu/Raumati 5.0 4.9 5.0 5.0 4.9 4.8 5.3 5.6 5.7 5.9 6.0 6.1 6.2 6.1 6.1

5.9

Waikanae/Otaki 4.5 5.4 5.2 4.7 4.7 5.2 5.5 5.8 5.8 5.9 6.5 6.8 6.6 6.7 5.5

5.4

                               

 

Upper Hutt:                                
Heretaunga/Silverstream 4.9 4.8 5.0 5.4 4.7 4.7 4.6 5.3 5.6 5.8 5.8 6.1 n.a. n.a. n.a. n.a.
Totara Park/Maoribank/Te Marua 5.6 5.6 5.6 5.7 5.8 5.8 5.2 5.7 6.2 6.3 6.2 6.8 n.a. n.a. n.a. n.a.
                                 
Lower Hutt:                                
Epuni/Avalon 4.7 5.0 4.5 4.8 4.9 5.1 5.6 5.1 5.5 5.8 5.2 5.1 n.a. n.a. n.a. n.a.
Taita/Naenae 5.5 5.7 5.9 5.5 5.6 5.8 6.1 6.2 6.5 6.8 6.9 7.1 n.a. n.a. n.a. n.a.
Wainuiomata 5.6 5.6 5.6 5.7 5.9 5.9 6.3 7.0 7.2 7.7 7.7 7.7 n.a. n.a. n.a. n.a.
                                 
Wellington:                              

 

Johnsonville/Newlands 4.9 4.9 4.6 5.0 5.0 4.9 4.8 4.8 5.2 5.5 5.4 5.6 5.8 5.6 5.5

6.2

Vogeltown/Berhampore/Newtown 5.0 4.9 4.3 4.5 4.5 4.2 4.1 4.6 4.9 5.4 5.2 5.5 5.1 5.5 5.2

5.6

                               

 

Tasman:                              

 

Motueka 4.2 4.2 4.5 5.0 4.4 4.0 4.0 4.7 5.3 5.2 5.4 5.3 5.3 5.5 5.6

5.5

Richmond/Wakefield/Brightwater 4.5 4.5 4.6 4.8 4.6 4.7 4.6 4.8 5.3 5.3 5.3 5.5 5.6 5.6 5.8

5.9

                                 
Nelson - Stoke/Nayland/Tahunanui 4.8 4.9 4.9 4.8 5.0 5.1 5.1 5.2 5.3 5.5 5.7 5.8 5.9 5.7 5.7

6.0

                                 
Blenheim 5.7 5.6 5.5 5.7 5.6 5.8 6.3 6.5 6.5 7.0 7.0 6.4 6.5 6.5 6.6

6.5

                               

 

Christchurch:                              

 

Hornby/Islington/Hei Hei 5.9 5.7 5.8 5.6 5.6 5.6 5.7 6.1 6.1 6.0 6.0 6.2 6.2 6.3 6.5

6.3

Riccarton 5.6 5.2 5.7 5.1 4.7 5.0 5.2 5.5 5.0 5.7 5.0 4.9 5.9 5.2 4.9

5.1

Woolston/Opawa 7.4 7.8 6.7 6.2 6.0 6.2 6.5 6.6 7.4 6.3 6.4 6.6 6.8 7.3 7.2

8.0

                                 
Ashburton 5.2 5.3 5.8 6.3 7.0 8.3 8.4 6.3 6.1 6.2 7.0 6.9 7.0 6.8 6.7

7.2

                               

 

Timaru 5.6 5.8 6.2 6.0 5.7 6.0 5.9 6.1 6.4 6.5 6.4 6.2 6.6 6.8 6.7

6.3

                               

 

Queenstown/Frankton/Arrowtown 4.2 4.2 4.3 4.4 4.6 4.3 4.1 4.5 4.3 4.6 5.2 5.0 4.8 4.9 4.7

5.3

                               

 

Dunedin:                                
Kenmure/Mornington 6.2 5.9 5.4 5.8 6.3 7.5 6.5 6.3 6.7 7.9 7.1 6.6 n.a. n.a. n.a. n.a.
Mosgiel 5.8 5.6 5.4 5.4 5.4 5.5 5.7 5.7 5.7 6.4 6.4 6.1 n.a. n.a. n.a. n.a.
South Dunedin/St Kilda 7.3 7.6 7.6 8.6 8.0 7.9 7.5 8.1 7.4 7.2 8.0 8.2 n.a. n.a. n.a. n.a.
                                 
Invercargill 8.2 7.9 7.9 8.9 8.3 8.3 7.9 8.3 8.4 8.7 9.1 9.0 6.7 9.0 9.2

9.5

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