Where to invest?
Question from John updated on 9th July 2018:
My partner and I have a freehold property in Canterbury with approximately $700,000 of equity. We are 10 years from retirement and think we should invest for some capital gains before we run out of time. I do not believe the investment market in the Christchurch area stacks up in respect of yields. I believe Dunedin might be a good place to invest. But I’m unsure what type of property and area will give us our maximum return over a ten year period?
Our expert Kris Pedersen responded:
Bear in mind that the overall New Zealand market is likely to have slower growth than has generally been seen over the last few years. Keeping that in mind, along with your stated goal of investing for capital growth, areas where there are population and general infrastructure growth are likely to do better than smaller regions. But do note that often these may have lower yields.
Given the scarcity of builders and the funding market being tight I can’t see Auckland catching up anytime shortly in regards to the amount of dwellings that need to be built. So, while I don't expect strong growth any time soon, I do think that the above will prevent much happening in regards to prices dropping and that it does stack up in the long term as a good area to invest in.
Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz