Yields creeping upwards
Property value growth around New Zealand has slowed significantly in recent months and that prompted CoreLogic to analyse what it means for returns on investment properties.
CoreLogic senior property economist Kelvin Davidson says that after a long period where average property values rose more quickly than rents, which meant gross rental yields fell, the situation has been reversing a little in recent months.
“Since the start of 2018, rents have been outpacing property values, and in the year to February 2019, the rise in national rents (5.6%) wasn’t far off double the increase in values (3.0%).”
He says it needs to be noted that this hasn’t been due to a pick-up in rents, as that is often linked to tenant income, but rather the slowdown in property value growth.
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