Things you need to know:
The material in the Westpac Property Investor Report (“Report”) is provided for general purposes only and should not be relied upon. All opinions, statements and analyses expressed in the Report are based on information current at the time of writing from sources that Westpac believes to be authentic and reliable. Westpac issues no invitation to anyone to rely on this material and intends by this statement to exclude liability for any such opinion, statement and analyses. We recommend you seek independent legal, financial and/or tax advice.
Median Weekly Rent: based on data released by the Ministry of Business, Innovation and Employment ("MBIE") on tenancy bonds lodged with MBIE from July 2015 to June 2016
Estimated Valuation: is the average estimated market valuation for all rental stock in that suburb as at 31 July 2016. Calculated using Data Insight's "Automated Valuation Model", which uses Real Estate Institute of New Zealand (REINZ) sourced data sales over a 12 month period (August 2015 to July 2016), property attributes and mathematical models to estimate the likely market valuation of rental properties in the relevant suburb based on recent comparable sales in that suburb and considering characteristics including age of building, land area, floor area and number of bedrooms and bathrooms.
Gross Yield: calculated by multiplying the Median Weekly rent of a suburb by 52 (weeks in a year), divided by the relevant suburb's Estimated Valuation.
Capital Gain: measures the change in Estimated Valuation between July 2014 and July 2016 for all rental stock in a suburb, divisible by the July 2014 valuation and annualised to calculate a percentage, which is then averaged across all properties in that suburb.
How does Estimated Value compare to Capital Value? Estimated Value is different from the Capital Value (CV) used by councils to set rates for properties. The Estimated Value is based on the details of specific individual properties, such as size, number of bedrooms and bathrooms, and similar properties recently sold, while the CV is a calculation of the land value with improvements determined for rateable assessment and as at a set date in time. Capital gains have been calculated based only on rental properties so all results are specific to the rental market.
Results have been considered and separated by property type and number of bedrooms, with the most common bedroom size for each suburb shown in the table above. Where data volumes were insufficient for a reliable separate output, the bedroom sizes were aggregated together.
Data Availability: Suburbs are reported on only where sufficient rental and property data is available for the reported period. To report on a suburb there needs to be sufficient data in all of the following areas to enable calculations to be made: stock (rental properties) in the suburb; sales activity (to enable the capital gains calculations to be made); and bond lodgements (to enable yield calculations).