Hi Guys
This looks like NZ’s next area or is it too late?
Rental market buoyant in south
23 February 2004
By PHIL MCCARTHYOverseas property investors are lining up to buy Invercargill houses to cash in on healthy rental returns, Invercargill real estate agents said yesterday.
Harcourts real estate agent Daryl Spence said an Australian buyer who snapped up 19 Invercargill properties totalling $1.3 million this month was one of increasing numbers of overseas clients eyeing Invercargill houses as property investments.
“We’re getting a lot of inquiries from overseas. It’s been going on for the last two to three months.”
Most interest was centred on lower-priced south Invercargill houses.
The Australian who bought 19 houses – including about 10 in one street – was taking advantage of a buoyant rental market in the city, Mr Spence said.
“He was from Melbourne and he was only getting 3 percent returns there, whereas he can get 10 percent here.”
Two clients from a real estate agency in Geelong had been in contact looking at similar investments, he said.
Invercargill was seen as offering good returns on smaller outlays, whereas the value of property in more exotic locations – such as Queenstown – was in capital gains on investment.
Southland Real Estate residential agent Neil van Schaik said many overseas buyers were expatriate Southlanders.
“I guess they know Invercargill’s on a roll and I suppose if they’re originally from here that’s why (they’re buying), or they’re hearing (about the property market) from friends and family.”
A former Southland woman living in Canada bought an Invercargill house at auction on Saturday, he said.
“We had her on the phone from Canada … you just don’t know where the calls are going to come from.”
A Ray White Real Estate spokesman said 10 to 12 percent returns on investments were making the market attractive for Australian buyers.
“I had an (Australian) lady walk in the other day and buy three houses.”
Blocks of city flats were in hot demand, he said.
New Zealand was also increasingly being seen as a “safe haven” for investing, he said.
Anybody from PI buy the 19 properties?
Regards
When I arrived in Rocky a while back I had the same urge….to buy up, if I could have afforded to do it I would have and would be looking real good right now.
Also when I bought in Kingston Qld one investor had just bought more than 13 homes there, they have made well over $1.3 million in equity in under 12 months!. Problem is if you have hassles or the market drops even a little you can have big problems unless you have big cash reserves.
It will be interesting to watch this town and how it all pans out with the amount of investors buying via the internet these days.I admit I know absolutely nothing about NZ, however, if the news is in the papers, I would say (as a general rule) it is probabaly too late.
There are others in this forum who have experience in NZ, which have been expousing the potential for some time now. They should be able to provide some better information.
James
The reason Invercargill yields are up is because the local university adopted a fee free policy. This led to around 2000 extra students moving to the town. Before this, the town was declining rapidly. The locals came up with the idea of subsidizing the fees in a desperate measure to turn the local economy around. It has worked brilliantly and is often studied by struggling regional councils in Aus, NZ, and Canada.
I am surprised that you can still buy +CF houses there as the RE boom was being bandied around over 12 months ago.
Bruce
Mooloolaba, QldPersonally, I think Invercargill….hmmm…may not get cap gain there, decreasing population…although it’s a great town, reminds me a bit of Gisborne, but colder.
OK, Tim Shadbolt is great mayor (so great that even people who have never been to the town have heard of it, and Tim!!) -he’s a rock-star major, if you know what I mean –
who has fantastic ideas such as ‘let’s get students here by offering education for free’, which temporarily (as long as scheme is there but not in other towns) gets bums on seats, so to speak, but, hmmm, population increasing? Trends say no. So, if CG is not a given, might even be a risk, then only buy there if on returns. But is 10 percent enough to bother? For me, no. I am used to 10 after holding costs. But for someone used to three, it seems stupendous. Go the Aussies…
*unsure*
mini
however people who bought BEFORE it was in the papers and prices rise, like a year ago, are laughing.
yields were better then too.
I think the moral of the story is have the confidence to do your own numbers. that enables you to be ahead of the pack.
Isn’t anyone concerned about currency fluctuations affecting potential income and capital gain? Always a risk when investing overseas especially given the massive changes in value of the AUD in the last 2 years.
Any thoughts?
I agree with MiniMogul, is 10% really enough? At that rate you are dependant on capital gains to make any money. One thing I never have come to terms with in Australia is the pitifull yield investors are willing to accept on something that should demand a higher risk factor on its yield. Still, people do have short memories…
Hi guys
don’t buy in invercargill.
IT’S MINE.[
]have a look around Qld there are some good deals apparently.
regards westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
i would like to add that if anyone can get an exceptional deal in Invercargill, it’s westan, he’s on the spot, and he’s in with the powers that be. And he’s a bird-dog!!!
cheers-
miniHi mini
thanks for the endorsement. i just want to say over the past 3 days i’ve spent time with 3 lots of Australians in Invercargill and all have bought (not all through me) one person 1 property, another guy 3 properties and the last couple bought 4. Invercargill actually is growing again. Last year Mini there were so many students some had to go home because they couldn’t find accomodation.[
]bye westan
I find +ve cashflow deals in New Zealand which I sell to other investors. To be on my database send an e-mail to [email protected]
Ah Westan, Invercargill was your secret spot huh?
Mini, suppose you are in there too…
Mini and U10,220,506A, I had reservations about Invercargill cg when I first heard about it last year. In the US, university towns don’t have the same cg as industrial towns. Maybe it is a combination of demand from one sector, one that leaves town for 2 months every year. However, yields still climb at market averages. I believe banks are pretty unimpressed lending for purpose built student accomodation too.Meanwhile, always trying to stay one step ahead of the pack, I am talking with sandstone university senate insiders as to where they are next expanding satellite campuses. Nice piece of info if you can get it…
Bruce
Mooloolaba, Qld
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