Thursday, 18 August 2022
Meet the JournalistsPremiumAucklandWellingtonCanterbury/South Island
CrimePoliticsHealthEducationEnvironment and ClimateNZ Herald FocusData journalismKāhu, Māori ContentPropertyWeather
Small BusinessOpinionPersonal FinanceEconomyBusiness TravelCapital Markets
Politics
Premium SportRugbyCricketRacingNetballBoxingLeagueFootballSuper RugbyAthleticsBasketballMotorsportTennisCyclingGolfAmerican SportsHockeyUFC
NZH Local FocusThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay of Plenty TimesHawke's Bay TodayRotorua Daily PostWhanganui ChronicleStratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu Courier
Covid-19
Te Rito
Te Rito
OneRoof PropertyCommercial Property
Open JusticeVideoPodcastsTechnologyWorldOpinion
SpyTVMoviesBooksMusicCultureSideswipeCompetitions
Fashion & BeautyFood & DrinkRoyalsRelationshipsWellbeingPets & AnimalsVivaCanvasEat WellCompetitionsRestaurants & Menus
New Zealand TravelAustralia TravelInternational Travel
Our Green FutureRuralOneRoof Property
Career AdviceCorporate News
Driven MotoringPhotos
SudokuCodecrackerCrosswordsWordsearchDaily quizzes
Classifieds
KaitaiaWhangareiDargavilleAucklandThamesTaurangaHamiltonWhakataneRotoruaTokoroaTe KuitiTaumarunuiTaupoGisborneNew PlymouthNapierHastingsDannevirkeWhanganuiPalmerston NorthLevinParaparaumuMastertonWellingtonMotuekaNelsonBlenheimWestportReeftonKaikouraGreymouthHokitikaChristchurchAshburtonTimaruWanakaOamaruQueenstownDunedinGoreInvercargill
NZ HeraldThe Northern AdvocateThe Northland AgeThe AucklanderWaikato HeraldBay Of Plenty TimesRotorua Daily PostHawke's Bay TodayWhanganui ChronicleThe Stratford PressManawatu GuardianKapiti NewsHorowhenua ChronicleTe Awamutu CourierVivaEat WellOneRoofDriven MotoringThe CountryPhoto SalesNZ Herald InsightsWatchMeGrabOneiHeart RadioRestaurant Hub

Advertisement

Advertise with NZME.
New Zealand

Rental property: Poorest areas pay best returns

24 Jun, 2013 05:30 PM3 minutes to read
David Whitburn.

David Whitburn.

Anne Gibson
By
Anne Gibson

Property Editor

VIEW PROFILE

Orakei and Devonport are a bad deal for new landlords paying prices which don't match the rents they can charge.

Tenants in Auckland's poorer areas pay less than those in more wealthy suburbs - but not relative to the value of the houses, figures show.

Data from Barfoot & Thompson shows about a $200-a-week difference between renting in Remuera compared to many parts of South Auckland.

Barfoot says Clendon Park in South Auckland is the city's best investment for a landlord because property prices are the lowest compared to relatively high rents: it has the highest annual rental yield of 7.4 per cent.

This is generated by an average sales price of $245,545 with a $349 a week average rent for a three-bedroom house, Barfoot says.

Advertisement

Advertise with NZME.

David Whitburn, Auckland Property Investors Association president, said the data did not show a huge rent variation.

"People who live in lower-income areas are not paying a lot less than those in the higher-income areas," he said.

Manurewa's average sale price of $315,197 returns an average rent of $362 a week, standing alongside Otara houses selling for an average $281,389 but giving $353 a week rent.

Massey's $386,333 average sale price delivers $384 a week rents, Otahuhu's $375,614 average sale price generates $377 a week and Takanini's $356,959 average price yields $372 a week rents.

Landlords get lower returns in the more expensive areas.

"At 2.3 per cent, Orakei, in the eastern suburbs has the lowest yield, an average sales price of $1,271,486, and an average rental of $569 a week," the agency said.

Related articles

Business

Helen Twose: KiwiSaver home subsidy rules can be tricky

24 Jun 05:30 PM
New Zealand|Politics

Mayor blocks councillor's bid to put transport funding to public vote

24 Jun 05:30 PM
New Zealand|Politics

Revolt over Unitary Plan secrecy

24 Jun 05:30 PM
New Zealand

NZ's most expensive rentals

24 Jun 05:30 PM

Devonport is also a bad deal for new landlords paying top prices for houses there but seeing very little money coming in: its average sale price is $1,056,429 but on average, a three-bedroom rental will return only an annual 2.9 per cent because of the $595 a week average rent.

Remuera is also pricey, with an average sale price of $1,122,813 yet a relatively low average rent of $607/week, giving a 2.8 per cent return.

Advertisement

Advertise with NZME.

Milford's average sale price is $944,714 but its average weekly rent is $529, which gives a low 2.9 per cent yield. In Northland, Kerikeri's average sale price is $660,818 but average weekly rents are only $342.

Browns Bay sits in the middle, delivering a 4.5 per cent yield to landlords which is also Auckland's average yield: Browns Bay's average house sale price is $585,500 and average weekly rents for a three-bedroom house are $501 a week.

Mr Whitburn said rents could be changing soon, particularly in Auckland's more affordable areas.

He is worried about Reserve Bank mortgage restrictions and the effects on the rental market.

"If highly geared over-80 per cent loans are restricted, then I am concerned that this will hurt first-home owners and new investors who haven't saved up enough.

"This will not stop property cycles but will probably slow down Auckland house price growth and raise rents in the lower to mid-range house price levels, because fewer people will be able to finance their own homes," Mr Whitburn said.

Advertisement

Advertise with NZME.

But foreign buyers will not be hit as hard because they have generally saved up more capital. Property managers Crockers found average Auckland rents had been stable and changed very little.

However, people pay about 35 per cent more to live in Auckland than elsewhere in New Zealand.

Advertisement

Advertise with NZME.

Latest from New Zealand

New Zealand

Waikato Hospital ward in lockdown after Covid spreads

18 Aug 05:30 AM
New Zealand|Crime

Young boy's name changed by judge to avoid shame

18 Aug 08:00 AM
New Zealand

Anxious young beauty therapist 'callously dismissed' - ERA

18 Aug 07:00 AM
New Zealand|Crime

Inmate lights fire in cell, disabling prison block's sprinklers

18 Aug 06:45 AM
New Zealand|Crime

'Just enjoying our night': Three friends describe sudden, unprovoked attack as pal beaten to death

18 Aug 06:34 AM

Most Popular

Seally season: Seal chases cat into marine biologist's lounge
New Zealand

Seally season: Seal chases cat into marine biologist's lounge

18 Aug 06:18 AM
Labour MP Gaurav Sharma speaks out; accuses PM and her office of a 'cover-up'
New Zealand|Politics

Labour MP Gaurav Sharma speaks out; accuses PM and her office of a 'cover-up'

18 Aug 06:27 AM
Premium
Stress on the flight deck: The pilots who suffered most during pandemic
Business

Stress on the flight deck: The pilots who suffered most during pandemic

18 Aug 05:45 AM

Advertisement

Advertise with NZME.
About NZMEHelp & SupportContact UsSubscribe to NZ HeraldHouse Rules
Manage Your Print SubscriptionNZ Herald E-EditionAdvertise with NZMEBook Your AdPrivacy Policy
Terms of UseCompetition Terms & ConditionsSubscriptions Terms & Conditions
© Copyright 2022 NZME Publishing Limited
TOP