Is there any city of 100k plus pop with high yields?

[OnTheMove]

The market is so overcooked it could be decades before properrties become high yielding ROI.

Unless you want to take a risk on sub 100k towns with little employment.

One down turn and unemployment will be significantly higher than any 100k pop city with jobs, which is taught by many as the minimum pop size to invest in, along with other key criteria. ie Dunedin fills that criteria, but prices there are now what my Grans deceased estate in Upland Rd Remuera was worth in 2008.

Is property investment outside redevelopment dead?

[elguapo]

The market is so overcooked it could be decades before properrties become high yielding ROI.
Unless you want to take a risk on sub 100k towns with little employment.

There are 7 cities in NZ above 100,000. (6 if you count Napier separate to Hastings) If that is your criteria, it's not a long list to pick from.

As for high yielding, what does this mean for you? Given a 1% base rate, anything above 5% is high these days.

but prices there are now what my Grans deceased estate in Upland Rd Remuera was worth in 2008.

House prices have gone up, did you miss the memo?

[OnTheMove]

No need for the sarcasm fulla.

Im just making a point that some SI properties are now reaching Auckland pricing and this ripple that some expected from the down turn and now up and down plateau.

[Don't believe the Hype]

https://www.propertytalk.com/forum/showthread.php?40534-Property-Investor-Mag-Growth-hotspot-Cannons-Creek-Porirua

[OnTheMove]

https://www.propertytalk.com/forum/s...-Creek-Porirua

Ive liked the coastal side of Porirua for some time. We actually considered moving to Welli and were looking at Titahi bay. But all those properties are now sky high.

As for Canons creek etc, Im not prepared to over capitalise in bad areas for current cashflow high ROI when Aucklands down turn will ripple eventually and that isnt even the actually potential crash, which is going to take a serious issue in lending or world economies to break our Iron clad double bubble (Key over inflating during GFC, then people taking that as false sense of security and over investing inflation money into our property market 2011-2017 in Auck). With Welli doubling median price in 3 years, the volatility is way to high to consider this a long term cashflow proposition. Id rather keep day trading than take any risk in such volatility.

I think until NZ returns to its true uninflated value (which imo is 30% below current median minimum), then I dont see us getting back to a nice steay flat lline 9% doubling every 8-10 years where everybody makes money, cashflow buyers, renovate and sell, renovate and hold, everybody. Right now I feel the only truely safe option is renovate and sell, in and out. But finding 10-20% below MV is getting harder as more and more buyers not selling Auck.

Thanks for the heads up though, but think I will let the market play out over the next couple of years and buy for PPOR only. :-)

God old Dunedin still has opportunities though and things didnt go completely mad there.

[Don't believe the Hype]

Titahi Bay - this is the gem of Porirua. While I agree the market has moved here it has moved everywhere and I still believe it is good value.

Based on this and many other posts overall i feel your risk aversion will hold you back. There seems to be always something that is wrong or a risk that stops you investing.

There is a risk reward ratio and if you simply want certainty and more than that a binary assessment of the opportunity you'll look forever and get nowhere.

It seems you understand that with your last comment about only buying your PPOR and if you're a day trader that is making money - stick with that. I personally don't like trading stocks for a host of reasons but it works for others.

You also have a firm belief that a crash is coming. I watched the Aus market since the late 80's and heard regularly that the crash was coming. There have been a number of dips in that market but in Melbourne circa 1990 you could buy a full section with a 3br house for $250-$300k... today that same location with a similar house is worth $1m+

There have been pull backs along the way but over the longer term the direction has always been positive.

As far as Cannons Creek goes - we're still buying in this market. We did think for a while that the market had overshot but this week we've been involved in the purchase of a property at a 9.8% gross yield (off purchase price & cost of upgrades to meet HH legislation).

Where else can you buy on nearly 10% Gross in a residential market 20mins drive from a major city?

You can spend your time worrying about a market dip... but the question you need to consider is what will happen to the rent on the property we're talking about above in the event that values dropped 10%, 20%, 40%? My POV is that there will still be strong rental demand, the market value decline will not force rents down (outside of a huge rise in unemployment).

[OnTheMove]

My POV is that there will still be strong rental demand, the market value decline will not force rents down (outside of a huge rise in unemployment).

I totally agree with you. Yes I am very risk adverse. Mostly for the Mrs as the one we are looking at now is her first ever person place of residence. If we drop 20%, there goes here hard savings. But Ive also told her, if this happens, just pay down as much as possible before rates rise and the market will return your 20% in time.

Which is the same everywhere. Even in the worst case like Ireland with its 40% drop, its essentially back to ground zero, which was quite a quick climb.

The Debt level and affordability is mainly what economists are concerned over, and its the lending forcing the RBNZ to raise rates that will impact the market. I dont think its going to be waiting much longer and I dont think its going to be a US crash etc.

So yes I agree, rents will remain in demand, as long as you can afford the interest rate rises and the loss of deposit, then waiting out and crash is possible. However many people are in this perpetual phase of using deposit from equity, rinse and repeat. If rates rise, it is this type of investor that will be caught out.

That who Mana and Titahi bay area is imo the best part of Welli. Although as a spearfisherman Makara is also high on my list but not sure about rental yields.

Im still seeing 8-9% on properties in Dunedin too.

Ive seen 6-7% on a few select multi dwelling properties in Auckland, whilst the yield isnt as high, the cashflow is big. :-)

Thanks for being positive and sharing your opinion respectfully.