While the Auckland property market flags, other regions show impressive results for property investors.

Gisborne is the best-performing region for rental property investment, according to analysis by Realestate.co.nz.

The real estate website found Gisborne offered an impressive 5.78 per cent average return on rental properties last month, based on an asking price of $258,515.

Otago and Manawatu/Whanganui followed closely with returns of 5.54 and 5.12 per cent last month.

Realestate.co.nz chief executive Brendon Skipper said the results would surprise some people.


"There are clearly some very attractive rental property investment opportunities in some parts of New Zealand that don't ordinarily attract intense national media interest."

The findings were based on a calculation of average asking price versus weekly rental price, excluding all external costs.

Realestate.co.nz's data analysis found the best-performing region was Coromandel, but its unusually high average return of 9.88 per cent was skewed by short-term holiday rental properties.

"Of greater interest for potential investors are the significant rental opportunities that exist in quite diverse parts of the country, in particular Gisborne, Otago and Manawatu-Whanganui," Skipper said.

The analysis looked at every region in the country to identify which offered the highest returns for would-be landlord investors.

Meanwhile, the steam continued to come out of the Auckland property market in January. Auckland was the only region to report a drop in house sales and a further slowing in annual price inflation, as regulatory curbs dim demand and the Government continues to free up more land in special housing areas.

The number of houses sold in Auckland fell 14 per cent to 1764 last month from the same month a year earlier, according to Real Estate Institute of New Zealand figures.

Across the country, the number of sales rose 4.3 per cent to 5048 in January and, excluding Auckland, that number was up 15 per cent as buyer demand spilled over to Northland, Waikato and the Bay of Plenty.

The REINZ figures showed the national median price rose 5.2 per cent to $448,000 in January from a year earlier, with new records in Hawkes Bay and Taranaki. Auckland prices were up 9.1 per cent to $720,000 in January from a year earlier, lagging behind gains in Waikato/Bay of Plenty, Hawkes Bay, Central Otago and Otago, all with double-digit growth on an annual basis.

"Auckland continues to show declining sales numbers. However, the reasons are many and varied, including an increasingly large group of potential sellers who are unable to find suitable new properties," REINZ chief executive Colleen Milne said.

That was "a reflection of the very tight listings position in Auckland and increasingly tight listings across the rest of the country".

- Staff reporter, BusinessDesk