Bank of NZ chief economist Tony Alexander made a number of observations on differences between Australia & New Zealand’s housing markets in his weekly market review yesterday.
Building homes for long-term rental went out of favour decades ago, aside from stop-start Housing NZ programmes. Now it’s back in New Zealand, but in its infancy, while overseas it’s become a recognised asset class for portfolio trading.
The US – without the same public sector dominance that has occurred in the UK, Australia & New Zealand since the Second World War – has a long-established corporate-built & -owned rental housing sector, commonly called multifamilies.
Without some of the support structure which exists in the US & UK, CBRE head of research Zoltan Moricz said it might be futile to throw them up as useful precedents for a similar evolution here.
Using local & US statistics, the CBRE research on build-to-rent development shows it can stack up on vacancy, diversification, cashflow, rental growth, yield & total returns.
Now that the New Zealand Government has produced statistics showing a low overall investment in New Zealand residential property by overseas investors, but investment that’s concentrated in specific areas, Chinese international real estate website Juwai.com has weighed into the argument.