The Auckland property market for property investors is now more so than ever before all about achieving high capital gains. The huge rise in property values in the region over the last year has eroded good yields where one to three percent is now the norm.
Property investors will continue to struggle to find properties that will provide the ideal five to seven percent in Auckland however these yields can be found in leasehold apartments.
Leasehold apartments value up a lot less than free hold unit titles yet the rental income is the same hence the difference in yield. An example is a 2 Bed and carpark leasehold apartment in the Docks complex in Britomart selling for $270,000 (the vendor paid $398,000 in 2009). The weekly rent is $630 which provides a gross yield of 12.1 percent.
“Once rates of $1853 and the body corporate levy (including ground rent) of $11,711 were allowed for, the yield would reduce to 7.1%, which is well above the returns most freehold apartments have been achieving and comparable with the net yields on many commercial properties.”
Auckland Investors can add good yielding cashflow positive properties to their portfolios. Commercial properties also provide reasonable yields of between five and eight percent.