Apartment investing

Andrea asks:
(updated on Monday, November 11th 2019)

I am a Kiwi that has lived in the US for 30+ years. Both of my parents recently passed away and I have just completed the sale of my parents' properties in Lake Tarawera and Wellington. I am now looking at an apartment investment in Mount Victoria in Wellington. I invest in the US in multi-unit apartments but I am new to investing in NZ.

What is the maximum loan to value currently offered by New Zealand banks? And which bank would you recommend for up to 12 unit properties?

The rents are currently under market and my plan would be to increase as leases roll over. I have read about the huge run-up in rents due to supply constraints: do you see that continuing for some time? Do apartment investors look purely at gross yield (50 x weekly income/value) or other metrics?





Our Experts Answer:

When you ask what the maximum LVR is for property I am presuming you are referring to investment properties. This is currently 70% unless looking at new builds which are exempt from the restrictions.
It is hard to say which bank is going to be best for up to 12 units as this will depend on the actual properties in question, whether they are all on one title or not and then the remainder of your profile.

In regards to apartments most investors will be looking at net yields with body corps also needing to be taken into consideration. (Let alone the other costs that should be looked at as well.)



Heartland Bank - Online 1.85
HSBC Premier 2.19
HSBC Special 2.25
Kainga Ora - First Home Buyer Special 2.25
China Construction Bank Special 2.65
Kainga Ora 2.88
SBS Bank Special 3.15
TSB Special 3.29
The Co-operative Bank - First Home Special 3.29
ICBC 3.29
Select Home Loans 3.34
Heartland Bank - Online 2.35
HSBC Premier 2.45
China Construction Bank Special 2.65
Select Home Loans 2.99
Kainga Ora 3.28
SBS Bank Special 3.69
ICBC 3.85
Resimac 3.89
Bluestone 3.89
TSB Special 3.94
Wairarapa Building Society 4.05
China Construction Bank Special 2.99
HSBC Premier 3.19
Select Home Loans 3.54
Kainga Ora 4.22
Bluestone 4.29
Resimac 4.29
SBS Bank Special 4.49
TSB Special 4.70
ICBC 4.79
The Co-operative Bank - Owner Occ 4.85
Westpac Special 4.95
ANZ Blueprint to Build 2.03
Heartland Bank - Online 2.25
ASB Back My Build 2.29
Resimac 3.39
Select Home Loans 3.49
Bluestone 3.74
ICBC 4.15
Kiwibank Special 4.25
Kiwibank 4.25
Kiwibank - Offset 4.25
Kainga Ora 4.43