Investors look outside Auckland

Posted by MarkL on December 8, 2014

Skyrocketing prices and low rental returns are seeing investors start to look outside of Auckland for property.

Quotable Value recently reported some Auckland suburbs had seen a five per cent price rise in the three to December 2014. Meanwhile the average rental return languishes at around 3.5 per cent.

Fairfax Media reported those numbers were driving investors and buyers to other centres such as Hamilton and Tauranga.

Harcourts general manager in Hamilton told Fairfax Media his agents had seen “a lot of people coming to town from outside the city, a lot of Aucklanders.

“It’s a very attractive place to buy, investment wise, compared to Auckland and what you can buy up there,” he said

Simon Lugton of Real Estate agency Lugtons in Hamilton agreed adding he had noticed a lot of Auckland property investors shifting to Hamilton.

“The market’s gone a bit nuts in terms of sales volumes. November was the best month we have ever had, “ he told Fairfax Media. 

Meanwhile average property values continued to rise in Tauranga and the Western Bay - up 3.6 per cent and 6 per cent respectively over the past year, according to QV.

New residential property price movement index figures show that Tauranga's average property values rose 3.6 per cent to $451,665 and the Western Bay district 6 per cent to $422,814.

LJ Hooker Tauranga principal Stephen Pepper told the New Zealand Herald the increase was down to a rising interest in good family homes, particularly from investors.

"The biggest change that we've had recently is we were having a lot of investor sales over the last couple of months and that soaked up a lot of the lower end of the market. The trend that we are seeing now is that we are seeing a lot of interest in family houses."