Buying investment property around Auckland's 'halo'

Wouldn't you love to retire comfortably, sipping an iced tea in the summer sun while an Italian masseuse gives you the best back massage money can buy?

With good financial advice and a bit of patience, this dream can be made a reality. Residential property investment is like farming – a lot of it comes down to sowing your money into the right soil. So what does that mean in practical terms?

An October 12 report from the Real Estate Institute of New Zealand (REINZ) shows that several areas surrounding Auckland have been seeing dramatic real estate growth. REINZ is calling this a 'halo' effect.

September snapshot

A glimpse at September's real estate figures show that the property market is still bubbling over from the heat. In that month, 8,174 dwellings were sold on the market, which is a 5.3 per cent increase on August and an incredible 38.3 per cent rise over the same period last year.

The median price on dwellings were recorded at a $484,650, which is a 15.4 per cent annual jump. Of course, this was driven heavily by Auckland property, which saw a 25.4 per cent rise in its median price.

While there has been signs of the market cooling down, the city remains the place to see the most real estate activity and is a popular hotspot for property investment.

I can see your halo

What is interesting is the rippling effect Auckland's market is having on surrounding regions. 

"There is continued evidence of Auckland investors and first home buyers spreading to other regions causing a 'halo' effect," says REINZ Chief Executive Colleen Milne.

Like a bowl with too much chicken soup, those wanting to buy an Auckland home to live in or as a residential investment property are now spilling over and spreading to surrounding areas.

The city of Hamilton continues to be a fertile land to harvest some incredibly fruitful returns. According to QV, housing values rose by 14.9 per cent from $362,299 to $416,290 in September. In terms of rental yields, the city's suburbs all experienced annual growth of between 7.9 to 16.2 per cent.

Values are rising in Hamilton. Get in early to make the most of it.Values are rising in Hamilton. Get in early to make the most of it.

So if you're thinking about an alternative to investing in Auckland, you could do well to scan the horizon. With Hamilton only a few hours drive from Auckland, but enjoying far more affordable housing, it currently stands as one of the most promising property investment areas within the City of Sails' 'halo'.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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