The Best Place to Buy an Investment Property in New Zealand
Ready to unlock the secrets to investing in New Zealand’s thriving property market? If you’re searching for the best place to buy an investment property in NZ, you’ve come to the right place. As Auckland’s local property experts, we’re here to guide you through the intricacies and help you make informed decisions that align with your investment goals.
New Zealand has diverse investment opportunities, from bustling cities to stunning coastal towns. Whether you’re a seasoned investor or just getting your feet wet, our expert insights will equip you with the knowledge and confidence needed to navigate this dynamic market.
But before we can look at the best areas to invest in property, it’s essential to understand the New Zealand market for investment properties. Let’s dive in!
What is an Investment Property?
An investment property in New Zealand is a piece of real estate purchased primarily for income generation or value appreciation. These properties are typically held for financial gain rather than personal use as a primary residence.
Many different types of investment properties are available, such as rental properties, rental holiday homes, and commercial properties, each with unique characteristics and potential returns.
The Benefits of Investing in Property
Securing one of the best investment property locations offers several benefits, including:
- Rental Income: Generate a reliable source of passive income.
- Capital Appreciation: Watch your property value increase over time, leading to capital gain once sold.
- Tax Benefits: Property investment can provide tax advantages, including deductions for mortgage interest, property taxes, and depreciation.
- Diversification: Property investment can diversify your investment portfolio and reduce your overall risk.
- Wealth Creation: An investment property is a powerful tool for generating wealth over the long term.
Understanding the New Zealand Property Market
Several factors influence New Zealand’s property market, making it important for investors to consider economic stability, population growth, infrastructure development, and government policies, as these will determine future trends.
Currently, New Zealand’s property market is recovering after peaking in November 2021 and experiencing rapid growth. While prices have stabilised in some regions, there remains strong demand for housing in major cities like Auckland and Christchurch.
What are the Best Cities for Investment Properties?
Auckland
New Zealand’s largest city presents a compelling investment landscape. Auckland’srobust economy, diverse population, and thriving job market contribute to sustained housing demand and property price growth. With a population increase of 2.8% in the year leading up to June 2023, Auckland’s appeal as a desirable place to live remains strong. Stats NZ projects a further 21% population growth by 2048, indicating continued future demand for property.
Auckland’s strong rental market supports its position as one of the best places for investment property. It offers investors the potential for consistent rental income and capital appreciation. Significant transport, education, and healthcare investments have enhanced Auckland’s liveability, attracting more residents and boosting property values.
Despite median rental yields of 2.34% based on median rent prices (Infometrics) and house prices (QV House Price Index), an investment property in Auckland remains desirable due to its potential for capital appreciation, robust housing demand, limited supply, diversification benefits, and long-term rental income.
Hamilton
Hamilton presents a compelling investment opportunity for Kiwi investors due to its growing economy and affordability. Its strategic location, growing population, and ongoing infrastructure development have made the city increasingly attractive to investors.
Compared to larger cities like Auckland and Christchurch, Hamilton generally offers much more affordable housing options, making it one of the best areas to invest in property for those seeking a lower entry point into the property market.
With competitive house prices, investors can achieve higher rental yields, contributing to capital growth. In fact, median rental yields in Hamilton are currently at 3.24%, based on median rent prices (Infometrics) and house prices (QV House Price Index).
While the rental yield is lower than other regions, the long term potential for capital growth makes Hamilton an enticing area to invest in property, especially with an estimated population growth of 34% by 2048.
Tauranga
In recent years, Tauranga, situated in the Bay of Plenty, has emerged as one of the best cities for investment properties. A steadily growing population (2.5% increase in the year leading up to June 2023), economic development, and the surrounding natural beauty make it a compelling location for property investors.
Agriculture, horticulture, manufacturing, and tourism contribute to the city’s thriving economy. A strategic location and infrastructure improvements have attracted new businesses and investment, further fueling economic growth.
Beautiful beaches, a mild climate, and numerous outdoor recreational activities make Tauranga a highly desirable place for residents and tourists alike, supporting property demand and rental markets.
Currently, median rental yields in Tauranga stand at 3.32%, based on median rent prices (Infometrics) and house prices (QV House Price Index), making it an attractive option for investors seeking a balance between affordability and rental income potential.
Rotorua
Rotorua, New Zealand’s geothermal wonderland, boasts a thriving tourism industry and has experienced recent growth in home values. In fact, during the August quarter, Rotorua witnessed the most significant home value increases in New Zealand, defying the national price decline trend and revealing itself as one of NZ’s best investment property locations.
Property prices and sales counts have remained stable and consistent, indicating steady demand for property in the region. Its natural beauty, thriving tourism industry, and significant infrastructure improvements have supported Rotorua’s growing population, making it an alluring location for investors.
With an average rental yield of approximately 3.59% (based on median rent prices from Infometrics and house prices from the QV House Price Index), Rotorua offers investors a potentially rewarding opportunity, especially as the population grows.
Rotorua’s market stability and resilience to fluctuations present investors with a safer and potentially rewarding opportunity for long-term growth.
Christchurch
Since the devastating 2011 earthquake, Christchurch has undergone a massive transformation and redevelopment. The city’s resilience and commitment to rebuilding have created a unique opportunity for investors.
Christchurch’s major urban renewal project has rebuilt the city centre with modern architecture and improved infrastructure across transport, healthcare, and education, attracting new businesses and residents.
The Christchurch City Council and the New Zealand government have significantly supported the city’s redevelopment efforts, creating a favourable environment for investment. Christchurch’s gradually increasing population has created a demand for housing, supporting the rental market and making the city one of thebest places for investment property.
Median rental yields in Christchurch currently stand at 3.42%, based on median rent prices (Infometrics) and house prices (QV House Price Index). Christchurch’s resurgence as a vibrant city provides investors with a unique opportunity to capitalise on its growth.
What to Consider When Choosing the Best Investment Property Location
You must consider a few key factors when choosing the best cities for investment properties. Rental demand and yields are paramount. Researching local demographics, employment rates, and tourist attractions will help you gauge the potential for consistent rental income.
Capital growth potential is equally important. Economic growth, population increases, and infrastructure development can significantly influence property value appreciation. Lifestyle considerations also play a role. Consider factors like proximity to amenities, schools, and transportation options, as these can impact property demand and rental yields.
Finally, infrastructure and amenities are essential. Investing in a location with well-developed infrastructure, including transportation networks, healthcare facilities, and educational institutions, can enhance property value and attract tenants.
Secure an Investment Property with Oaks Living
Now that we’ve looked at some of the best places to buy investment property in NZ, are you ready to take the next step and capitalise on New Zealand’s thriving property market? Choose one of Oaks Living’s new developments in Auckland, one of the best areas to invest in property. Our carefully curated developments present investment opportunities in prime locations with the potential for excellent returns.
Discover our project portfolio and find the right opportunity for you and your investment goals. Contact us today to learn more about how Oaks Living can help you achieve your investment goals.
