Investment Yields - How low can they go?
Apr 19, 2016
Last Wednesday the Total Property 1 Auctions were held and there was arguably the strongest ever results achieved across the length and breadth of Auckland. With yields of 5.54% in Mangere, 4.48% in Grey Lynn, 4.78% in Mt Wellington, 4.37% in Henderson and 5.05% in Glen Eden, this was a buying frenzy.
To view the full auction results click here.
With 91% sold under the hammer and more sales pending, the results highlight the huge investor demand for income producing property.
As we anticipate further interest rate cuts in not too distant future, many investors are asking themselves, can yields get any lower? Others are becoming nervous as they are losing the buying opportunity to get a significant return on their money. Others could now suffer capital losses if there was a blow-out in yields in the coming year or two. Things are interestingly poised and most would agree that the prices just can’t keep on going up … or can they?
Previous Market Commetary: Snapshot - Eden Terrace Leasing 2016