Top 10 Auckland suburbs bringing the highest rental income

Are you looking for property investment NZ advice? Baffled as to where to buy a house to rent out? Or maybe resorting to Google typing “investment opportunities NZ”? The truth is it’s not always easy for property buyers to choose the right place to invest in. Figuring out which neighbourhood will be the most lucrative in future years can be a daunting task. But we are here to provide you with expert information on the Auckland suburbs bringing the highest rental income! Keep reading this article, where we will tell you:

  • Why New Zealand and Auckland, in particular, is a great place for buying property
  • What you should look for when investing in property
  • Which are the best suburbs in Auckland to invest in

​The appeal of New Zealand property investment for foreign buyers

Despite New Zealand’s 2018 ban on the sale of homes to foreigners, which was followed by the COVID-19 pandemic, cross-border investor interest in New Zealand property remains high. Some of the reasons for this are:

  • because New Zealand’s location is a geographical asset to wealthy individuals’ Asia funds and the Asian region is expected to recover financially from COVID-19 quicker than Western countries;
  • because the country’s property sale and purchase rules are very clear and its court system functions well, which results in people considering property investing in New Zealand to be safe;
  • because Prime Minister Jacinda Ardern directly appealed to wealthy investors to set up shops in the country in order to help the country’s economy after the pandemic. This move led to companies like Microsoft swiftly opening offices there. The country’s market is rated high for transparency, which reassures investors.

 

The appeal of Auckland for foreign property investors

Auckland is a city that is especially appealing to property investors from all over the world. This is because:

  • it has a strong construction pipeline, especially for housing, which drives its growth;
  • it has seen enviable growth in population in recent years due to an increase in immigration;
  • it is considered the country’s economic powerhouse, contributing almost 40% of the nation’s GDP and providing multiple New Zealand investment opportunities in a wide range of sectors.

Foreign millionaire investors who own NZ property

There are numerous well-known foreign millionaires who own property in New Zealand. Among them are Hollywood film director James Cameron, the billionaire Facebook investor and Paypal creator Peter Thiel, and even the Sultan of Brunei!

If you are asking yourself a question “how can I choose the best property to invest in”, watch this video:

Auckland investment property in numbers

The statistics confirm that Auckland is favoured by global property investors. Foreign investment NZ-wide is significant.

Before the 2018 ban on home buying for foreigners, foreign home buyers accounted for under 3% of total property sales around the country. Yet this figure was 22% for Auckland, which accounts for about 30% of total property sales in New Zealand.

In 2020, the city saw a strong house price growth of 17.4% bringing the average price to NZ$ 1,040,000 – the country’s most expensive. It is no surprise, therefore, that residents of Auckland are largely choosing to rent with nearly 36% of its occupants living in rental accommodation. Rental yields in Auckland range from 6.09% to 7.18%, making property in the city a solid and profitable New Zealand investment.

​The Successful Property Investor’s Check-list

When choosing a property to invest in, there are certain factors that you should take into consideration in order to choose the right area and see some significant growth. Here is a checklist that will guide you in choosing high-growth suburbs and up-and-coming Auckland suburbs (2021):

Property investment NZ (infographic)

  • Transport: It is in your best interest as an investor to buy a property that has public transport and major roads close by. People rely on good roads and/or public transportation to go to work and travel, so access to trains and buses is a major selling point for renters.
  • Amenities: Having amenities nearby, such as shops, restaurants, green parks, gyms, and entertainment facilities, will ensure your property is in an area with a high lifestyle appeal that is always sought after.
  • Medicine: Proximity to medical centres is also very important, though people are usually unwilling to live near long-term care hospitals. That’s because seeing patients from their windows and listening to the droning sirens from ambulance cars is not a desirable result.
  • Education: Proximity to schools, colleges, and universities is especially important either for the tenants who have families or for students seeking to rent an apartment.
  • Growing population: A good indication that you will get your money’s worth from your property investing in New Zealand is when suburbs show strong and solid population growth. This means they will have a high demand for property eventually, which will make your property easier to rent out.
  • Vacancy rate: Smart property investors should look for areas with low vacancy rates, in order to avoid having a vacant property which could strain them financially.
  • Future developments: Before investing, you should find out what future developments have been planned for the area. These could affect your investment property positively (i.e. a new shopping centre) or negatively (i.e. a landfill or too many residential buildings which could have an impact on your property’s demand). Local councils should be able to inform you about planned developments.

​Auckland’s most lucrative suburbs

Here are the top 10 suburbs in Auckland that rank first among landlords, bringing some of the highest rental incomes:

  1. Orere Point: Orere Point has been estimated to provide a return that was more than the cost of borrowing the money to buy a property with a median rental yield of 6.1%. The population has increased by 14.5% in the last five years, showing incredible growth. It is an area with good access to public transport, many amenities, schools and medical centres that is characterised by a very low vacancy rate.
  2. Auckland Central: With a 4.9% median rental yield, Auckland Central is a fantastic area for property investment in New Zealand. With low vacancy rates, an abundance of transport options, public services and amenities on offer, and a growing population, it is certain to bring investors a healthy profit.
  3. Grafton: Grafton’s median rental yield is estimated at 4.8%. The area offers a good choice of public transport, schools, medical centres, and lifestyle amenities. While its population has not grown significantly, it is experiencing an influx of immigrant residents and low vacancy rates.
  4. Otara: Otara is a rather crowded suburb with very low vacancy rates, where investors can enjoy high rental yields. According to the last census information, it has a population growth of around 10% since the 2013 census and it has a good transport system, medical centres, schools, and a large selection of amenities.
  5. Clendon Park: Clendon Park’s median rental yield is around 4.5%. Its population is steadily rising as it provides residents with anything they could possibly want: good transport options, public services, and many amenities. The majority of the suburb’s occupants are renters.
  6. Orakei: Orakei is a very popular suburb for expatriates, with 7.2% of British nationals in Auckland choosing this particular area for its exceptional lifestyle amenities and many schooling options for their children. Houses in the area are rapidly increasing in price, as is the number of renters.
  7. Epsom: Epsom is a popular area located close to highly desirable prime locations. This suburb is known as ‘the Grammar Zone’, since it is home to the city’s best schools. With house prices in Epsom rising fast, renting is becoming more and more popular in the area.
  8. Franklin: According to the census data, Franklin has grown more quickly than wider Auckland in the last five years. The area is great for property investors, as it has a very low vacancy rate, while at the same time offering all necessary amenities and services for its residents.
  9. West Auckland: For the past 20 years, Auckland’s population grew at an average rate of 1.9% per annum. Being so close to the city’s CBD, West Auckland is a perfect choice of area to buy property in.
  10. The North Shore: The North Shore is one of the fastest growing areas in the country, with a growing population and many planned future developments, making it the best place to buy investment property in New Zealand (or one of them!). With vacancy rates for rentals currently going down, investing in NZ’s North Shore is a no-brainer.

 

Welcome to New Zealand!

Investment property New Zealand-wide is a great choice for buyers – local and international alike. The country is becoming increasingly popular around the world, praised for its effective leadership, environmentally friendly strategies, and financial transparency for businesses, which are all factors driving foreign investors to the country.

The numbers and statistics are showing that Auckland, in particular, is very sought by investors from all over the world. Many of the city’s suburbs fulfill the criteria of our “Successful Property Investor’s Check-list”, which makes them a deserving choice for a sophisticated property investor.

If you already are an Auckland real estate owner, you are wholeheartedly welcome to CGPM! With our Property Management expertise, we will be glad to help you handle any property-related issues. Alternatively, our Property Managers can provide you with a Free Rental Appraisal as banks often require this when lending money. CGPM aims to make your renting experience an enjoyable one