Manawatu-Wanganui Attracting NZ House Investors By Offering Big Capital Gains

2 min read | March 24, 2021 12:39 AM AEDT | By Team Kalkine Media

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Manawatu-Wanganui Attracting NZ House Investors By Offering Big Capital Gains

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Earlier in March 2021, IMF stated that New Zealand government should consider using capital gains tax (CGT) to control the enormous rise in its property prices.

New Zealand’s Manawatu/Whanganui is appearing as the top-most region for property investment, reveals the Real Estate Institute of New Zealand (REINZ).

This region has offered the 2^nd highest capital gains throughout the country with a Y-O-Y increase of median price of 25.3% for Q4 ended December 2020 i.e. from $400000 to $501000. Furthermore, this region witnessed 4% annual yield, which is also the fourth highest.

Other NZ Regions With Offerings

According to the report, NZ’s West Coast with 5.8% had the highest yield in the country. the region offered 6^th highest capital gains from $209,000 to $251,200, up 20.2%.

With 4.1% Taranaki recorded the 3^rd highest yield and 5^th highest capital gains, up 21% from $405K to $490K.

On the contrary, NZ’s second-oldest settled city, Nelson was the lowest on capital gains from $600K to $665K, slightly up by 10.8%. Also, it became the least performing region for house investors with just 3.4% as its annual yield.

MUST READ: NZ To Ponder On Capital Gains Tax To Revive House Prices, Urges IMF

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As per Wendy Alexander, Acting Chief Executive, REINZ relatively smaller towns and regions offer best returns to the property investors, thus, making them more affordable. Potential investors should think out of the box and invest where their property grows the maximum instead of just investing near the vicinity.

Alexander expressed that most of the regions in New Zealand saw a considerable growth in Q4 in terms of capital gains amid the post-COVID period.

This is well attributed to cheap interest rates offered by banks, investors taking advantage of the removal of Loan-To-Value Ratio (LVRs), more emphasis on investing in house property rather than taking international holidays, to name a few. She further stated present increase in property prices reflects continuous fall in yields.

It is noted that Auckland witnessed the lowest yield of 2.9% and was at 11^th spot for capital gains.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)

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