It would seem the Auckland property market is reaching a plateau. Price increases have been underpinned by a shortage of properties, high net migration and high investor activity.

New conditions to be imposed by the Reserve Bank on November 1, including a 30 per cent deposit requirement for Auckland house purchases alongside an easing of restrictions outside Auckland on purchases with less than a 20 per cent deposit, may well see investors looking elsewhere.

In the medium term, the increased rate of building in Auckland combined with an expected fall in net migration could well see the end of the property shortage and reduced pressure on prices.

Huge increases in property prices (24 per cent in the last year) in Auckland have not yet been matched by equivalent increases in rent, which means the gross income yield (annual rent divided by property value) on Auckland properties is particularly low, being well under 5 per cent. Without capital gain, there will not be much in it for investors.

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Meanwhile, the rest of the country has been lagging behind and has some catching up to do. As investors abandon Auckland, there could well be opportunities for capital gain in other areas resulting from increased investor attention.

There are several areas around the country where gross income yields are in excess of 6 per cent, which compares favourably with mortgage interest rates as low as 4.35 per cent. Further details of income yields nationally by region can be found at qv.co.nz.

The spillover from Auckland will not only be investors but also people looking to cash in at the top of the market and move elsewhere, first-home buyers who have been squeezed out by the higher deposit requirements, and renters who face rising Auckland rents.

Those investors who get in early in areas outside Auckland could make good returns.