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A Total Returns Index for Investor Housing in New Zealand

Author/s: Bob Hargreaves, Song Shi

Date Published: 1/01/2005

Published in: Volume 11 - 2005 Issue 3 (pages 253 - 267)

Abstract

The absence of a total returns index makes it difficult to compare the performance of investor housing between regions and with other asset classes in New Zealand. As a first step in overcoming this deficiency, the authors integrated information from two existing government data bases, the first covering residential rents and the second covering house sales. The relationship between gross rents and net income was established by surveying a random sample of residential property investors. This survey also provided base line information showing private sector investor housing typically sits midway between the lower quartile and median house price bands. The total returns indices confirm that the overall decline in net yields over the last decade has been more than offset by increases in property values.

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Keywords

Investment Performance - Investor Housing - New Zealand - Total Returns Index

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