Hello,
Welcome to the fifteenth edition of the West Auckland monthly Residential Landlords Newsletter.
I am a landlord myself and have been for over 30 years. I have recently brought more rental investments last December in West Auckland and another in Millwater, Silverdale in May. I currently own rental properties in South Auckland, the North Shore and West Auckland. Being a high preforming Real Estate Agent (top 1% in New Zealand) for over 26 years and always working in West Auckland I know the real estate market and the rental market very well.
In this and future newsletters I hope to provide ongoing up to date information relevant to landlords who own rental properties in West Auckland.
Regular features will include:
- Current sale prices
- Current mortgage rates
- Current rents
- A monthly suburb spotlight review
- A relevant feature article each month
I hope you will find it useful. I am available for free advice and opinion on any residential or lifestyle real estate matter.
|
Sale Prices |
|||
| Suburb |
Median selling price Oct 2015 |
No sold | Days to sell |
| Titirangi |
$784,000 |
16 |
26 |
| West Harbour |
$1,015,000 |
21 |
31 |
| Glendene |
$740,000 |
15 |
30 |
| Henderson |
$675,000 |
83 |
31 |
| Hobsonville |
$970,000 |
7 |
43 |
| Massey |
$650,000 |
23 |
33 |
| Ranui |
$562,500 |
16 |
33 |
| Sunnyvale |
$742,500 |
4 |
45 |
| Swanson |
$697,500 |
4 |
32 |
| Te Atatu Peninsula |
$756,000 |
17 |
27 |
| Te Atatu South |
$670,000 |
30 |
30 |
| Glen Eden |
$653,000 |
39 |
33 |
| New Lynn |
$665,000 |
35 |
34 |
| Kelston |
$717,500 |
8 |
36 |
| Royal Heights |
$730,000 |
11 |
27 |
| Laingholm |
$782,500 |
4 |
32 |
| Whenuapai |
$1,221,000 |
5 |
59 |
Source REINZ
|
Current Mortgage Rates (28/11/2015) |
|||||
|
Float |
1 yr fixed |
2 yr fixed |
3 yr fixed |
5 yr fixed |
|
| ANZ |
5.99% |
4.35% |
4.49% |
5.10% |
5.35% |
| ASB |
6.00% |
4.39% |
4.49% |
4.49% |
5.09% |
| BNZ |
5.89% |
4.35% |
4.39% |
5.19% |
5.35% |
| Westpac |
6.15% |
4.39% |
4.39% |
4.65% |
6.25% |
| Kiwi Bank |
5.90% |
4.49% |
4.49% |
4.85% |
5.35% |
| Best of other lenders |
5.59% |
3.99% |
4.25% |
4.49% |
4.99% |
Source – J Goodrum – Internet search
|
Current Rents |
|||||
|
1st May – 31st Oct 15 |
|||||
| Glen Eden |
Average Rent |
Bonds Paid |
Royal Heights/Massey | ||
| 2 brm flat |
$350.00 |
17 |
2 brm flat |
$350.00 |
15 |
| 2 brm house |
$390.00 |
30 |
3 brm flat |
$417.00 |
6 |
| 3 brm house |
$450.00 |
113 |
1 brm house |
$290.00 |
5 |
| 4 brm house |
$550.00 |
19 |
2 brm house |
$365.00 |
19 |
| Glendene | 3 brm house |
$450.00 |
137 |
||
| 1 brm flat |
$300.00 |
9 |
4 brm house |
$550.00 |
36 |
| 2 brm flat |
$370.00 |
11 |
5+ brm house |
$610.00 |
19 |
| 2 brm house |
$385.00 |
18 |
Te Atatu South | ||
| 3 brm house |
$450.00 |
64 |
1 brm flat |
$250.00 |
7 |
| 4 brm house |
$500.00 |
18 |
2 brm flat |
$350.00 |
17 |
| Henderson | 2 brm house |
$397.00 |
22 |
||
| 1 brm apartment |
$320.00 |
5 |
3 brm house |
$470.00 |
53 |
| 2 brm apartment |
$380.00 |
5 |
4 brm house |
$550.00 |
11 |
| 2 brm flat |
$370.00 |
55 |
5+ brm house |
$692.00 |
6 |
| 3 brm flat |
$365.00 |
12 |
Te Atatu Peninsula | ||
| 2 brm house |
$375.00 |
61 |
1 brm flat |
$307.00 |
6 |
| 3 brm house |
$450.00 |
214 |
2 brm flat |
$375.00 |
17 |
| 4 brm house |
$530.00 |
83 |
2 brm house |
$395.00 |
21 |
| 5+ brm house |
$652.00 |
22 |
3 brm house |
$480.00 |
69 |
| Kelston | 4 brm house |
$590.00 |
16 |
||
| 1 brm apartment |
$290.00 |
26 |
5+ brm house |
$490.00 |
5 |
| 2 brm apartment |
$330.00 |
5 |
Titirangi | ||
| 1 brm flat |
$290.00 |
9 |
1 brm flat |
$287.00 |
24 |
| 2 brm flat |
$352.00 |
2 |
2 brm flat |
$375.00 |
8 |
| 1 brm house |
$300.00 |
7 |
1 brm house |
$307.00 |
6 |
| 2 brm house |
$377.00 |
14 |
2 brm house |
$400.00 |
30 |
| 3 brm house |
$450.00 |
72 |
3 brm house |
$500.00 |
73 |
| 4 brm house |
$510.00 |
13 |
4 brm house |
$580.00 |
23 |
| New Lynn | West Harbour | ||||
| 1 brm apartment |
$310.00 |
21 |
1 brm flat |
$300.00 |
11 |
| 2 brm apartment |
$385.00 |
12 |
2 brm house |
$392.00 |
16 |
| 1 brm flat |
$290.00 |
15 |
3 brm house |
$475.00 |
93 |
| 2 brm flat |
$377.00 |
72 |
4 brm house |
$585.00 |
34 |
| 3 brm flat |
$450.00 |
7 |
5+ brm house |
$700.00 |
11 |
| 1 brm house |
$315.00 |
10 |
Western Beaches/Rural | ||
| 2 brm house |
$400.00 |
35 |
1 brm flat |
$295.00 |
8 |
| 3 brm house |
$460.00 |
99 |
2 brm flat |
$350.00 |
5 |
| 4 brm house |
$540.00 |
16 |
1 brm house |
$330.00 |
5 |
| Ranui | Average Rent | Bonds Paid | 2 brm house |
$380.00 |
50 |
| 2 brm flat |
$245.00 |
7 |
3 brm house |
$440.00 |
46 |
| 2 brm house |
$375.00 |
10 |
4 brm house |
$540.00 |
21 |
| 3 brm house |
$435.00 |
99 |
5+ brm house |
$545.00 |
8 |
| 4 brm house |
$500.00 |
12 |
|||
Source NZ Government building & housing
|
|
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|
Royal Heights |
||||||
|
Date |
Median selling price |
5 year gain % |
||||
| Oct 1995 | $246,000.00 |
- |
||||
| Oct 2000 | $205,000.00 |
-16.7% |
||||
| Oct 2005 | $365,000.00 |
78.1% |
||||
| Oct 2010 | $382,250.00 |
6.1% |
||||
| Oct 2015 | $730,000.00 |
91.0% |
||||
| Over 20 years |
196.8% |
|||||
|
||||||
|
Ranui |
||||||
|
Date |
Median selling price |
5 year gain % |
||||
| Oct 1995 |
$130,000.00 |
- |
||||
| Oct 2000 |
$147,000.00 |
13.1% |
||||
| Oct 2005 |
$265,500.00 |
80.6% |
||||
| Oct 2010 |
$256,000.00 |
- 3.6% |
||||
| Oct 2015 |
$562,500.00 |
119.7% |
||||
| Over 20 years |
332.7% |
|||||
Source NZ department of statistics
Should I buy rentals outside of Auckland?
With the very high prices now in Auckland a number of rental investors have begun investing in rental properties in other cities around the country. The median price in West Auckland is now $705,000. Tauranga, Hamilton, Hawkes Bay, Nelson and Queenstown have seen much investor activity recently and prices (remember the key driver is supply verses demand) have started to rise in these cities due to the extra demand.
Remember the two key reasons for investing in residential rental investment actual yield = % rental return on investment (cost of property) and capital gains. In my first issue of the West Auckland Landlords Newsletter I stated that capital gains in the medium to long term should be your main objective.
Of course you can get better yields by buying rentals outside of Auckland. The difficulty of controlling your rental in say Tauranga if you live in Auckland is a lot harder. Visiting the property let alone doing any repairs, redecorations, getting quotes for work done and so on is much harder at a distance. It also means you have to rely and pay property managers a lot more than when your rental is close by.
But what about the all-important capital gains? Let us look at the capital gains over the past 20 years.
| Location | Median Selling Price | Capital Gains | Location | Median Selling Price | Capital Gains |
| West Auckland |
1995 $156,000 |
Napier |
1995 $112,500 |
||
|
352% |
169% |
||||
|
2015 $705,000 |
2015 $330,000 |
||||
| Hamilton |
1995 $138,000 |
Nelson |
1995 $138,000 |
||
|
215% |
179% |
||||
|
2015 $435,000 |
2015 $381,000 |
||||
| Tauranga |
1995 $135,000 |
Queenstown |
1995 $220,000 |
||
|
248% |
184% |
||||
|
2015 $135,000 |
2015 $624,500 |
||||
Clearly West Auckland has given by far the highest capital gains. Whilst cash flow may be important the real value in residential rental investments is the capital gains. Add to this the other major concern- the ease of selling when you wish to cash up. Except in a very strong market it is usually much more difficult to sell and it takes a lot longer to sell in other locations compared to Auckland.
Likewise when a rental becomes vacant it frequently takes a lot longer to find another tenant in many cities compared to Auckland. The actual return on the investment can therefore be a lot lower than expect after vacancy is taken into account.
With 60% of all migrants settling in Auckland and the other 40% spread across the rest of New Zealand the capital gains in Auckland are likely to continue to outperform all other N.Z cities. With massive infrastructure improvements – motorways, tunnel link to the airport, large developments throughout the West such as Westgate, Hobsonville Point, Kumeu, Riverhead and more West Auckland is a prime Auckland suburb in which to invest.
Until next time,
Best wishes,
John Goodrum
Licensee Agent REAA 2008
021945140, 09 838 8895
Barfoot and Thompson