Southland best-performing region for investors

Southland is still the best-performing region for residential property investors, according to a Real Estate Institute of New Zealand report.

The Capital Gains and Rental Yield Report says capital gains in Southland have increased by 22 per cent for the three months ended March when compared to the same time last year – the secondhighest capital gains in the country.

Southland also holds the second-highest yield in the country, which increased 4.8 per cent year-on-year.

Median prices in the region currently

REINZ chief executive range from $287,000 to $350,150.

The West Coast is close behind, with the third-highest capital gains in New Zealand, up by 17.4 per cent and holds the highest yield at 6.1 per cent.

REINZ chief executive Bindi Norwell said that while all regions had a good lift in capital gains, Southland had once again proven to be the standout region in terms of providing investors with good returns.

‘‘[It’s] 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. 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 rents due to job losses.’’

The report found that Auckland had the third lowest capital gains across the country and the lowest annual yield of all regions, making it the worst performing region for residential property investors.

‘‘The following few months are likely to be an interesting time for investors. On one hand, we’ve got some of the lowest lending rates we’ve ever had, the [loan-tovaluation ratios] have technically been temporarily removed, and lending to investors is up 25.7 per cent year-on-year.

‘‘But on the flip side, the country is facing significant levels of rising unemployment and investors are waiting with bated breath to find out whether the 90-day notice will be removed as part of the Residential Tenancies Act changes.’’

‘‘It will be interesting to see what level of impact Covid19 has for residential property investors.’’ Bindi Norwell,