Westpac Property Investor Report

Yield or capital gain?

If you’re looking at investing in property some of the questions you’re likely to ask yourself include “do I invest for capital gain or yield?” and “where should I invest?”.

The exclusive Westpac Property Investor Report (September 2016) may help shed some light on finding the answers to those questions and more.

The full Report identifies the top suburbs for yield or capital gain returns in seven centres across New Zealand; including Auckland, Hamilton, Tauranga, Palmerston North, Wellington, Christchurch and Dunedin, for the 12 months to September 2016, and is only available from your local Investment Property Lending Specialist. 

Take a look below at our snap shot of the top suburbs for residential investment.

Auckland

Auckland

Overall, although Auckland no longer topped the house price growth table for the latest 12 months, looking over the last three years, areas towards the south of Auckland have seen the strongest growth in capital gains across the country. Examples include areas such as Otahuhu, where 2-bedroom apartments have increased in value by 34.6% and Clendon Park where the average 3-bedroom house has increased in value by 26.9%.

When considering only “rental yields”, areas close to the CBD represent the best areas to invest. Areas such as Ponsonby, Grafton, Auckland Central and Eden Terrace maintain strong yields, with a 3-bedroom in Grafton returning a gross yield of 10.4% in the latest twelve months.

Auckland: Top 10 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Capital Gain
Otahuhu Apt/Flat (2 Beds) $365 $455,000 34.6%
Clendon Park House (3 Beds) $458 $560,000 26.9%
Otara House (3 Beds) $453 $545,000 26.0%
Randwick Park House (3 Beds) $445 $577,500 24.1%
Mangere East Apt/Flat (2 Beds) $349 $445,000 24.0%
Stonefields House (All) $665 $1,720,000  23.8% 
Manurewa  House (3 Beds) $476 $625,000  23.6% 
Red Hill  House (3 Beds) $417 $562,500  23.5% 
Wellsford  House (3 Beds) $360 $490,000  23.3% 
Auckland Central  Apt/Flat (1 Beds)  $401 $415,000  23.2% 

Auckland: Top 10 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Gross Yield
Ponsonby Apt/Flat (All) $495 $225,000 12.8%
Grafton  Apt/Flat (3 Beds) $508 $305,000 10.4%
Grafton  Apt/Flat (2 Beds) $521 $300,000 10.3%
Auckland Central Apt/Flat (2 Beds) $534 $465,000 7.5%
Mount Eden Apt/Flat (1 Beds) $359 $317,500 7.2%
Grafton Apt/Flat (1 Beds)  $381 $340,000  6.9% 
Parnell Apt/Flat (1 Beds)  $449 $425,000  6.5% 
Eden Terrace Apt/Flat (1 Beds)  $383 $400,000  6.3% 
Auckland Central App/Flat (3 Beds)  $721  $675,000  6.3% 
Auckland Central App/Flat (1 Beds)  $401  $415,000  6.1% 

To find out more about residential property investment lending, speak to one of our local Investment Property Lending Specialist, and don't forget to ask them about the full Westpac Property Investor Report - which includes details of rental yield and capital gains on 250 suburbs across seven New Zealand cities.

Hamilton & Tauranga

Hamilton

Hamilton has seen very strong growth in capital gains, with areas north of the city such as Flagstaff and Rototuna seeing the highest growth at 20.4% and 19.9% respectively. Lower value properties closer to the centre of Hamilton have also seen strong growth in capital gains, such as units in Bader that had an average capital gain of 19.9%.

When considering only “rental yields” 3-bedroom apartments in areas such as Dinsdale and Frankton represent the best return on investment with average gross yields of over 6%.

Hamilton: Top 10 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2014) Capital Gain
Flagstaff House (3 Beds) $445 $340,000 20.4%
Bader Apt/Flat (All) $273 $320,000 19.9%
Rototuna House (3 Beds) $448 $645,000 19.8%
Enderley House (3 Beds) $354 $352,500 19.5%
Glenview Apt/Flat (All) $244 $370,000 19.5%
Bader House (3 Beds) $351  $355,000  19.0% 
Chartwell House (3 Beds) $382 $510,000  18.9% 
Nawton Apt/Flat (All) $241  $315,000  18.9% 
Dinsdale House (4 Beds) $403  $500,000  18.8% 
Rototuna North House (3 Beds) $435 $640,000  18.8% 

Hamilton: Top 10 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Gross Yield
Dinsdale Apt/Flat (3 Beds) $370 $350,000 6.3%
Frankton Apt/Flat (3 Beds) $370 $345,000 6.2%
Enderley House (3 Beds) $354 $352,000 6.2%
Bader House (3 Beds) $351 $355,000 6.1%
Whitiora Apt/Flat (2 Beds) $294 $270,000 5.9%
Nawton House (4 Beds) $441 $450,000 5.8% 
Pukete House (4 Beds) $454  $575,000  5.7% 
Frankton House (3 Beds)  $356  $395,000  5.5% 
Glenview House (4 Beds) $423  $490,000  5.5% 
Nawton House (3 Beds)  $361  $405,000  5.4% 

Tauranga

Tauranga has seen the highest growth in capital gains in the last twelve months nationwide, with areas on the southern outskirts of the city offering the best return. Areas such as Poike, where theaverage house has seen capital gains of 24.2%, and 3-bedroom houses in Gate Pa, where the average capital gain has been 23.4%.

Gate Pa also offers the best “rental yield” in the region, with a 4-bedroom house having an annual gross yield of 6.5%.

Tauranga: Top 5 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Capital Gain
Poike House (All) $361 $395,000 24.2%
Gate Pa House (3 Beds) $370 $412,500 23.4%
Gate Pa House (4 Beds) $431 $425,000 22.6%
Parkvale House (3 Beds) $365 $400,000 22.2%
Papamoa Beach Apt/Flat (All) $356 $455,000 22.1%

Tauranga: Top 5 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Gross Yield
Gate Pa House (4 Beds) $431 $425,000 6.5%
Gate Pa House (3 Beds) $370 $412,000 5.8%
Parkvale House (3 Beds) $365 $400,000 5.8%
Poike House (All) $361 $395,000 5.6%
Hairini House (3 Beds) $390 $450,000 5.5%

To find out more about residential property investment lending, speak to one of our local Investment Property Lending Specialist, and don't forget to ask them about the full Westpac Property Investor Report - which includes details of rental yield and capital gains on 250 suburbs across seven New Zealand cities.

Palmerston North & Wellington

Palmerston North

The best growth in Palmerston North is in Roslyn where apartments and flats gained 7.2%. Houses in Cloverlea also saw a 7.2% gain.

Palmerston North: Top 5 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Capital Gain
Roslyn  Apt/Flat (All) $208 $215,000 7.2%
Cloverlea House (3 Beds) $306 $280,000 7.2%
Cloverlea Apt/Flat (All) $236 $220,000 6.7%
Highbury Apt/Flat (All) $229 $215,000 6.4%
Milson Apt/Flat (All) $236 $230,000 6.2%

Palmerston North: Top 5 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Gross Yield
Westbrook House (All) $319 $230,000 7.3%
Hihgbury House (3 Beds) $302 $260,000 6.3%
Roslyn House (3 Beds) $311 $270,000 6.3%
Cloverlea  Apt/Flat (All) $236 $220,000 6.1%
Takaro  House (3 Beds) $317 $280,000 6.1%

Wellington

Recently Wellington has seen big increases in “capital gains”, with houses in areas such as Cannons Creek (Porirua) and Mount Victoria up >12%. In terms of “rental yield” houses in Waitangirua in Porirua and Timberlea in Upper Hutt offered the best annual returns with 8.2% and 7.9% respectively.

Wellington: Top 10 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Capital Gain
Cannons Creek House (3 Beds) $311 $257,500 12.5%
Mount Victoria House (All) $657 $1,050,000 11.8.%
Petone House (3 Beds) $490 $620,000 11.8%
Newtown House (All) $537 $670,000 11.7%
Maungaraki House (3 Beds) $418 $545,000 11.5%
Roseneath House (All) $679 $940,000  11.4% 
Berhampore House (All) $495 $610,000  11.4% 
Newlands  House (3 Beds)  $441 $500,000  11.4% 
Johnsonville House (3 Beds)  $451 $540,000  11.0% 
Strathmore Park House (All) $617 $630,000  11.0% 

Wellington: Top 10 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2015) Gross Yield
Waitangirua House (All) $336 $235,000 8.2%
Timberlea House (All) $385 $265,000 7.9%
Cannons Creek House (3 Beds) $311 $257,500 7.3%
Wellington Central Apt/Flat (1 Beds) $344 $265,000 7.3%
Ascot Park House (All) $378 $320,000 7.2%
Maoribank House (All) $386 $320,000  7.0% 
Stokes Valley Apt/Flat (All)  $270  $220,000  6.9% 
Wainuiomata House (3 Beds)  $320  $265,000  6.9% 
Taita House (3 Beds)  $363  $310,000  6.8% 
Berhampore Apt/Flat (All) $349  $295,000  6.6% 

To find out more about residential property investment lending, speak to one of our local Investment Property Lending Specialist, and don't forget to ask them about the full Westpac Property Investor Report - which includes details of rental yield and capital gains on 250 suburbs across seven New Zealand cities.

Christchurch & Dunedin

Christchurch

Christchurch has seen much lower capital gains growth recently, but areas such as Merivale and Saint Albans continue to offer good capital gains for apartments at 8.1% and 7.7% respectfully.

When looking at “rental yield” only, purchasing an apartment in areas such as Phillipstown and Richmond offered the best returns at 7.2% and 7% respectfully.

Christchurch: Top 10 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2016) Capital Gain
Christchurch Central Apt/Flat (1 Beds) $305 $280,000 8.8%
Merivale Apt/Flat (2 Beds) $370 $485,000 8.1%
Saint Albans Apt/Flat (3 Beds) $449 $560,000 7.7%
Westmorland House (All)  $550 $715,000 7.5%
Merivale House (3 Beds)  $549 $1,075,000  7.0%
Wainonui  House (3 Beds)  $379 $350,000  6.8% 
Parklands House (4 Beds)  $512 $595,000  6.7% 
Christchurch Central Apt/Flat (2 Beds) $358  $405,000  6.7% 
Mount Pleasant House (3 Beds)  $464 $610,000 6.3%
Avondale House (3 Beds) $400 $375,000 6.2%

Christchurch: Top 10 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2016) Gross Yield
Phillipstown Apt/Flat (2 Beds) $315 $245,000 7.2%
Richmond Apt/Flat (2 Beds) $307 $232,500 7.0%
Phillipstown House (3 Beds)  $391 $300,000 6.9%
Aranui House (3 Beds)  $371 $295,000 6.8%
Parklands Apt/Flat (All) $323 $295,000 6.5%
Edgeware Apt/Flat (2 Beds) $311  $280,000  6.5%
Avonside  House (All)  $393  $345,000  6.4% 
Christchurch Central Apt/Flat (1 Beds) $305  $280,000  6.3% 
New Brighton Apt/Flat (2 Beds) $313  $260,000  6.3% 
Wainoni House (3 Beds)  $379 $350,000 6.2%

Dunedin

Dunedin’s highest capital gains continue to be strongest in the student enclave of North Dunedin for housing (4.4%) and Roslyn for apartments/flats (4.1%). While Glenleith has the highest gross yield for housing at 8.4% with Dunedin central topping gross yield for apartments/flats at 7.5%.

Dunedin: Top 10 suburbs for Capital Gain returns

Suburb Property type Median Weekly Rent Estimated Valuation (2016) Gross Yield
Kaikorai House (3 Beds) $352 $295,000 10.5%
Wakari House (3 Beds) $332 $315,000 10.2%
Sait Kilda House (4 Beds) $368 $285,000 9.4%
Kenmure House (3 Beds) $336 $300,000 9.1%
Halfway Bush House (3 Beds) $320 $267,500 8.7%
North East Valley House (4 Beds) $360 $270,000 8.7%
Dalmore House (All) $307 $265,000 8.6%
Saint Kilda House (3 Beds) $330 $275,000 8.4%
Maryhill House (All) $313 $310,000 8.2%
Sawyers Bay House (All) $399 $265,000 8.2%

Dunedin: Top 10 suburbs for Gross Yield returns

Suburb Property type Median Weekly Rent Estimated Valuation (2016) Gross Yield
Sawyers Bay House (All) $399 $265,000 8.3%
South Dunedin House (3 Beds) $291 $195,000 8.2%
Corstorphine House (3 Beds) $383 $260,000 7.7%
Caversham House (3 Beds) $297 $210,000 7.7%
The Glen House (All) $298 $225,000 7.5%
Sait Kilda House (4 Beds) $368 $285,000 7.4%
North East Valley House (4 Beds) $360 $270,000 7.3%
Liberton House (All) $303 $230,000 7.3%
Forbury House (All) $321 $235,000 7.3%
North Dunedin House (All) $569 $430,000 7.2%

To find out more about residential property investment lending, speak to one of our local Investment Property Lending Specialist, and don't forget to ask them about the full Westpac Property Investor Report - which includes details of rental yield and capital gains on 250 suburbs across seven New Zealand cities.