Southland has remained in the spotlight for residential property investors by having the second highest yield and the second-highest capital gains in the country, according to the latest data by the Real Estate Institute of New Zealand (REINZ).
REINZ's latest Capital Gains and Rental Yields Report revealed that Southland's capital gains jumped by 22% for the three months ended March 2020 compared to the same period last year. Its yields also increased by 4.8% year-on-year, making Southland the “standout” region for residential property investors.
“Again, Southland has proven to be the ‘standout’ region in terms of providing investors with good returns – a trend we've seen for a number of months now, mostly the result of low property prices and good rental returns across the region,” said REINZ chief executive Bindi Norwell.
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The West Coast had the third-highest capital gains in the country, up 17.4% for the first quarter of 2020 compared to the same period last year. It also had the highest yield in the country at 6.1%.
Meanwhile, the Manawatu-Wanganui region took the top spot in having the highest capital gains in the country, with a 23.9% increase year-on-year. Its yields reached 4.3% annually, making it another region that shows promising returns over the next 12 months.
“All regions across the country saw a good lift in capital gains for investors a result of strong median prices increases, with all but three regions (Auckland, Canterbury, and Nelson) seeing double-digit increases,” Norwell said.
“Looking forward, it will be interesting to see what level of impact COVID-19 has for residential property investors, particularly when you take into account the rental freeze and some tenants' inability to pay their rent due to job losses.”