10 areas netting 25% returns in NZ

CoreLogic has calculated annual investment total returns by combining gross yields with a change in property values.

Here are the top 10 New Zealand areas by annual investment total returns, with Mr Davidson noting the gross return on capital invested would be even higher for a mortgaged investor:

1. Rangitikei
2. Clutha
3. Gisborne
4. Otorohanga
5. Wanganui
6. Wairoa
7. Manawatu
8. Kaweau
9. Horowhenua
10. Dunedin

While all of the top 10 were noted as delivering returns above 25 per cent, Rangitikei, Clutha and Gisborne all managed returns above 30 per cent.

In his analysis, Mr Davidson also highlighted that there are 10 regions nationwide posting gross rentals yields in excess of 5 per cent.

“Those are impressive figures, especially when you consider that term deposits are currently paying less than 3 per cent,” he said.

Here are the top 10 New Zealand areas by gross rental yield:

1. Grey
2. Buller
3. Clutha
4. Waimate
5. South Taranaki
6. Ruapehu
7. South Waikato
8. Waitomo
9. Rangitikei
10. Wairoa

Homing in on Clutha, Mr Davidson commented: “Looking more closely at that part of the country, our data shows that it has a very small number of available listings, meaning that buyers have little choice.”

The demand side of the equation also looks solid, according to the economist, who observed close to 100 purchases in Clutha last year alone – making it the second largest year for purchases in the area since 2008.