High-profile rental properties in premium Auckland suburbs are being snapped up by cashed-up mum and dad investors.
New Zealand Property Investors Federation’s president Sharon Cullwick said that investors with just one rental property were the ones making all the moves right now, with larger investors sitting on the side-lines.
READ MORE: Find out if your suburb is rising or falling
“People are looking for alternatives to put their money. The return on a term deposit is around 2.5 per cent while the return on a rental property could be 3 or 4 percent,” Cullwick said.
Start your property search
In a recent survey of the federation’s 320 members, 74 percent said they hadn’t purchased a property in the last 12 months. And of those, 44 percent said they wouldn’t be purchasing in the next year.
Yields were low right now and investors with more than two properties in their portfolios were waiting for a better return.
The results of the survey came as Barfoot and Thompson agents Aaron Foss and Cindy Yu sold a six-bedroom rental in Mission Bay, Auckland, for $2.45 million under this hammer.
The property at 65 Selwyn Avenue has an annual rental income of $75,000, resulting in a 3 percent yield.
Foss said the lucky buyer had made a pre-auction offer and ended up being an only bidder in the room. “The buyer is likely to rent it out and sometime down the track pull it down and develop a three-storey block as it’s zoned for development,” he said.
53 Brighton Road, in Parnell, Auckland, has an annual rental income of $150,000. Photo / Supplied
Foss said investors were on the hunt for stock, noting that he had sold a 139sqm apartment at 2B/1 Furneaux Way in Remuera to an investor last month for $1.5 million.
“I am seeing quite a bit of it lately, where the buyer decides to live in the investment property while they renovate their own home,” he said.
Last month, Bayleys sales agent Fleur Denning sold a grand two-storey villa that had been converted into flats for $4.425 million.
The property at 53 Brighton Road, in Parnell, Auckland, was snapped up by an investor after strong competition. The yield on the property was 3.39 percent.
