Next Property Workshop on 6th July 2024

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Why invest in
Auckland Real Estate

3 Reasons to Consider the City of Sails

Auckland, New Zealand's largest city, is a vibrant hub brimming with opportunity. For Australians looking to diversify their investment portfolio, Auckland offers a compelling proposition. Here are three key factors that make Auckland an attractive destination for property investment:

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New Zealand's Largest City and Population Hub

Auckland’s large, growing population and open immigration policies fuel rental demand. This translates to low vacancy rates and high potential returns for property investors.

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Auckland Development Opportunities

The Auckland Unitary Plan allows for development opportunities through intensification. Compared to Sydney, Auckland offers a more affordable entry point.

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Strategic Timing in Property Cycle

Auckland’s recent market correction presents an opportunity for investors. Despite the dip, historical trends show strong long-term growth potential.

Strong Rental Market Driven by Demographics & Immigration

  • Population Powerhouse: Auckland boasts over a third of New Zealand’s population, creating a concentrated demand for housing. Unlike Australia, where the population is spread across major cities, Auckland offers a unique advantage.

 

  • Open Door Policy: New Zealand’s immigration settings are generally favourable, with Australians specifically exempt from requiring Overseas Investment Office consent to purchase residential property. This steady influx of residents bolsters the rental market.

 

  • Net Migration Magnet: Auckland experiences significant net migration, meaning more people move in than leave. This constant demand keeps rental vacancy rates low and rental yields attractive for investors.
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Opportunities with the Auckland Unitary Plan

  • Development Opportunities: The Auckland Unitary Plan (AUP) streamlines the development process, allowing investors to unlock the potential of land for residential projects. This plan zones specific areas for intensification, creating opportunities for higher-density housing.

     

  • Intensification Advantage: Compared to Sydney’s property market, Auckland offers a more affordable entry point for development projects. The AUP’s focus on intensification allows for the creation of more housing units on smaller land parcels, making development potentially more cost-effective.

  • Tax Benefits: Unlike Australia, New Zealand offers significant tax advantages for property investors. There’s no stamp duty on property purchases and no capital gains tax for properties held long-term. It’s important to note that the bright-line test applies to properties sold within a shorter timeframe, but this doesn’t affect investors who hold onto their properties for the long haul.

Strategic Timing - The Current Market ​

  • Market Correction: The Auckland property market has experienced a period of correction. While this may seem like a deterrent, it can be viewed as an opportunity for savvy investors.

  • Long-Term Growth: Despite the recent dip, Auckland’s property prices have shown consistent growth over the past two decades. This historical trend suggests a strong potential for long-term capital appreciation.

  • Economic Diversification: Compared to a potentially recessionary environment in Australia, New Zealand’s economy is on a more stable footing. This translates to a more accessible lending environment for investors in Auckland, while Australian borrowers may face tighter restrictions. With easier access to finance, Auckland presents a potentially opportune moment to secure developable property.
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