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Southland highest performing region for investors

The Southland region is currently the strongest performing region for investors with residential property with the second highest capital gains and second highest yield according to new research from the Real Estate Institute of New Zealand (REINZ).

Capital gains in Southland increased by 20.5% for the three months ending August when compared to the same time last year with median prices going from $245,599 to $296,000. Additionally, yields increased 5.2% year-on-year making it the standout region in New Zealand.

The Manawatu-Wanganui region also had a strong performance from an investment perspective with the highest capital gains seen across the country – up 23.0% year-on-year and the fourth highest yield at 4.7%.

Similarly, Gisborne performed very well in terms of capital gains, up 15.6% year-on-year and good annual yields (4.5% annually) making it another region where investors will have seen good returns over the past 12 months.

Bindi Norwell, Chief Executive at REINZ says: “The majority of the regions were high in one measure and low in the other, so for Southland to have a strong result in both capital gains and yields indicates that it was a very good region for investors to have investment property in over the past year.
“Similarly, investors in the Manawatu/Wanganui region are likely to have been quite pleased with how their residential investment properties have performed over the past year,” continues Norwell.

“Conversely, investors in Auckland saw capital gains fall -1.5%, but yields still increased marginally from 3.2% to 3.4%, a result of the continued shortage of rental stock which continues to push up rental prices,” continues Norwell.

Looking across the Auckland region saw quite mixed results with capital gains highest in Papakura and North Shore (+5.6% and +2.4% respectively), but yields were up in all areas with the exception of Papakura. Manukau City saw the largest drop in capital gains (-3.2% annually) and Auckland City had the lowest yield at 3.0%.

“With some of the lowest lending rates available to residential property investors and other forms of investment having lower return rates, residential property is looking increasingly positive for investors at the bottom of the South Island and the middle of the North Island – just not in Auckland,” concludes Norwell.

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