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A comparison of residential house price yields across the Tasman has turned up interesting results, with both New Zealand and Australia showing they're good places to invest, but for different reasons.
Wednesday, July 2nd 2008, 12:00PM
by The Landlord
Crockers’ latest research data tracked median selling prices for homes in key cities of Australia and New Zealand between 2004 and 2008. Then they looked at median three-bedroom rentals to come up with estimated rental yield trends.
While they found rental yields have fallen by almost 21% in Auckland, they have been rising dramatically in Australia. Sydney experienced an increase of around 30% and Melbourne 16%. However, they still remain lower than in Auckland, where properties are now returning yields of 5.02%. All of the New Zealand cities offer yields of between 5% and 6%, whereas Australian cities are offering between 3% and 5% – except for Darwin. Darwin shows the top rate for all Australian cities with an estimated 6.07% yield.
However, yields must be balanced by a look at capital gains made during this period and these present another picture. Over the past four years, Sydney prices have remained almost static – in stark contrast to Auckland’s prices – which virtually doubled, gaining 44% in an uninterrupted climb.
Melbourne fared slightly better than Sydney with 15% growth. Greatest growth in Australia came from the boom time economies of Queensland and Western Australia in particular. In Darwin and Perth property prices almost doubled between 2004 and 2008. Brisbane showed a 50% increase and Canberra 28%.
Wellington, like Auckland, experienced consistently rising prices resulting in a 56% increase over the same period. Of the next cities, Christchurch, Adelaide and Hobart all show almost identical rising trends, as does Dunedin.
Crockers’ Karen Coleman says this research indicates the New Zealand property market overall looks pretty good as a place to invest.
“While Australian yields are low, you’ve got to remember they also have lower interest rates and you’ve got to factor that in. But the New Zealand property market continues to be a good investment option long term."
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Mortgage Rates Table
Full Rates Table | Compare Rates
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
---|---|---|---|---|
AIA - Back My Build | 5.94 | - | - | - |
AIA - Go Home Loans | 8.49 | 6.45 | 5.89 | 5.79 |
ANZ | 8.39 | ▼6.95 | ▼6.39 | ▼6.39 |
ANZ Blueprint to Build | 7.39 | - | - | - |
ANZ Good Energy | - | - | - | 1.00 |
ANZ Special | - | ▼6.35 | ▼5.79 | ▼5.79 |
ASB Bank | 8.39 | 6.45 | 5.89 | 5.79 |
ASB Better Homes Top Up | - | - | - | 1.00 |
Avanti Finance | 8.90 | - | - | - |
Basecorp Finance | 9.60 | - | - | - |
BNZ - Classic | - | 6.45 | 5.89 | 5.79 |
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
BNZ - Mortgage One | 8.44 | - | - | - |
BNZ - Rapid Repay | 8.44 | - | - | - |
BNZ - Std | 8.44 | 6.45 | 5.89 | 5.79 |
BNZ - TotalMoney | 8.44 | - | - | - |
CFML 321 Loans | 6.70 | - | - | - |
CFML Home Loans | 6.95 | - | - | - |
CFML Prime Loans | 8.75 | - | - | - |
CFML Standard Loans | 9.70 | - | - | - |
China Construction Bank | - | 7.09 | 6.75 | 6.49 |
China Construction Bank Special | - | - | - | - |
Co-operative Bank - First Home Special | - | 6.19 | - | - |
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
Co-operative Bank - Owner Occ | 8.15 | 6.39 | ▼5.89 | ▼5.79 |
Co-operative Bank - Standard | 8.15 | 6.89 | ▼6.39 | ▼6.29 |
Credit Union Auckland | 7.70 | - | - | - |
First Credit Union Special | - | 6.75 | 6.35 | - |
First Credit Union Standard | 8.50 | 7.35 | 6.95 | - |
Heartland Bank - Online | 7.99 | 6.69 | 6.35 | 6.15 |
Heartland Bank - Reverse Mortgage | - | - | - | - |
Heretaunga Building Society | 8.90 | 7.00 | 6.50 | - |
ICBC | 7.85 | 6.45 | 5.99 | 5.89 |
Kainga Ora | 8.39 | 7.05 | 6.59 | 6.49 |
Kainga Ora - First Home Buyer Special | - | - | - | - |
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
Kiwibank | 8.25 | 7.35 | 6.89 | 6.69 |
Kiwibank - Offset | 8.25 | - | - | - |
Kiwibank Special | - | 6.45 | 5.99 | 5.89 |
Liberty | 8.59 | 8.69 | 8.79 | 8.94 |
Nelson Building Society | 8.75 | 6.85 | 6.39 | - |
Pepper Money Advantage | 10.49 | - | - | - |
Pepper Money Easy | 8.69 | - | - | - |
Pepper Money Essential | 8.29 | - | - | - |
SBS Bank | 8.49 | 7.19 | 6.49 | 6.49 |
SBS Bank Special | - | 6.59 | 5.89 | 5.89 |
SBS Construction lending for FHB | - | - | - | - |
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
SBS FirstHome Combo | 5.94 | 5.59 | - | - |
SBS FirstHome Combo | - | - | - | - |
SBS Unwind reverse equity | 9.95 | - | - | - |
TSB Bank | 9.19 | 7.25 | 6.79 | 6.69 |
TSB Special | 8.39 | 6.45 | 5.99 | 5.89 |
Unity | 8.64 | 6.70 | 6.49 | - |
Unity First Home Buyer special | - | 6.20 | - | - |
Wairarapa Building Society | 8.50 | 6.65 | 5.99 | - |
Westpac | 8.39 | 7.45 | 6.79 | 6.59 |
Westpac Choices Everyday | 8.49 | - | - | - |
Westpac Offset | 8.39 | - | - | - |
Lender ▲▼ | Flt ▲▼ | 1yr ▲▼ | 2yr ▲▼ | 3yr ▲▼ |
Westpac Special | - | 6.85 | 6.19 | 5.99 |
Median | 8.44 | 6.70 | 6.35 | 5.89 |
Last updated: 12 September 2024 9:27am