PHOTO: Bindi Norwell. Photo credit: Newshub.
Data released earlier this month showed COVID-19 had done nothing to stop house prices rising. Now there’s more evidence property investors will emerge from the pandemic largely unscathed, with rental yields holding up despite a freeze on increases.
The Real Estate Institute of New Zealand’s (REINZ) latest Capital Gains and Rental Yields Report, released on Friday, shows only minor drops in yields to investors.
“With the introduction of a six-month rental freeze in March as a result of COVID-19, it’s not surprising that yields fell for most parts of the country from a percentage perspective,” said REINZ chief executive Bindi Norwell.
“However, none of the falls were particularly dramatic suggesting that initial fears that yields would be significantly impacted by rising unemployment as a result of COVID-19 have been unfounded.”
Combined with annual capital gains still in the double-digits for most regions, investors will be breathing a sigh of relief through their face masks.
The best-performing region overall is Southland, with capital gains just shy of 20 percent and rental yields of 4.9 percent – down from 5.5 percent last year.
“For Southland to continue to provide such positive gains for investors on both a capital gains and yield perspective means that the region is really ticking all the boxes from a strategic investment perspective,” said Norwell, predicting prices will continue to go up.
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