Hayden Fahey - Investing in Retail Property

http://www.stuff.co.nz/business/money/9539298/Insider-guide-to-investing-in-rental-property

Investor property up.

In Gregg Ninnes Stuff article, Inside Guide to Investor Property, information regarding the opportunity of perspective property investors and property value to rental values were discussed. Housing shortages in central areas are creating a surge in rental prices, with Christchurch and Auckland most affected, Auckland median rents raising 10% from last year. Other centres such as Hamilton and Wellington may prove to be better for residential property investors.  

Residential property rents in New Zealand’s largest centres have seen an increase since last year, Auckland suburbs have seen a median rent increase of 10% since October last year. Christchurch has had an increase of upto17% in poplar suburbs such as Cashmere and Riccarton, (Real Estate Institute of New Zealand, 2014).

The higher rents offer higher returns to investment property owners with existing properties. For investors expanding portfolios in large centres will find it difficult to achieve profitability because property prices have generally risen faster than rents.

Other market areas such as Hamilton are proving to be more reliable areas for prospective investors. Hamilton has experienced rents rising faster than property prices in most residential property areas. The median selling price of properties sold in Hamilton in October was up five per cent on October last year. Prospective investors are presented with higher profit yields on their investments (Real Estate Institute of New Zealand, 2014).

Wellington has experienced a stable residential property market recently. With relatively low growth in rental values and little or no rise in property values the market has remained very stable. Median rents through the wider area of Wellington rising less than 5% while the median property value increased by 0.5% over the same period (Real Estate Institute of New Zealand, 2014).

Advice for Welly Real Estate based on the information provided on this article is to move into the residential rental property management. There is evidently opportunity for profitability in the investment of residential properties for rent. Wellingtons stable property market serves as a relatively safe option for property investment, increasing rent values and stable property values offer great opportunity for a profitable investment. Hamilton also provides an ideal area for property investment, with rents rising faster than property values. These properties should be providing improving rental yields. With residential properties throughout the country becoming increasingly expensive for purchase and limited properties available, rental properties are becoming more popular. Property management is an economically viable option in the current property market for Welly Real Estate.

Citations used.

Ninness, G. (2013, December 21). Stuff. Retrieved April 2014, from http://www.stuff.co.nz/business/money/9539298/Insider-guide-to-investing-in-rental-property

Real Estate Institute of New Zealand. (2014, March). REINZ Regional Data March 2014 . Retrieved May 4, 2014, from REINZ: