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 (July 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 July 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.
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.
| 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% |
| 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 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%.
| 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% |
| 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 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 the average 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%.
| 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% |
| 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.
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.
| 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% |
| 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% |
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.
| 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% |
| 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 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.
| 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% |
| 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’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%.
| 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% |
| 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.