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Best Place to Buy a Rental Property in NZ: STR Investments in New Zealand

Last updated on January 2nd, 2024

Best Place to Buy a Rental Property in NZ: STR Investments in New Zealand: Wondering where to invest in New Zealand to secure a positive cash flow? Then you’d check the best place to buy a rental property in NZ!

Best Place to Buy a Rental Property in NZ: STR Investments in New Zealand

best place to buy a rental property in NZ

Best Place to Buy a Rental Property in NZ: STR Investments in New Zealand

Wondering where to invest in New Zealand to secure a positive cash flow? Then you’d check the best place to buy a rental property in NZ!

Best Place to Buy a Rental Property in NZ: STR Investments in New Zealand

Key Takeaways

  • New Zealand’s stunning landscapes, positive economic growth, and stability contribute to its attractiveness for both visitors and investors, creating a great environment for Airbnb real estate investments.
  • Discover what can you expect from real estate investments in New Zealand by knowing the the market dynamics and potential challenges.
  • Using Airbtics’ Airbnb Host Calculator, the top 13 markets for short-term rental investments in New Zealand have been identified, providing valuable insights for property investors seeking optimal returns.

Unveiling New Zealand’s Prime Short-Term Rental Hotspots

Located in the southwestern Pacific Ocean, New Zealand is a fascinating country featuring breathtaking natural beauty. With landscapes ranging from golden beaches and lush forests to majestic mountains, this island country has what it takes to leave a strong and lasting impact on those who visit.

Aside from its breathtaking beauty, NZ is also a profitable country to make an Airbnb real estate investment considering that it welcomes a large influx of overnight visitors and has a strong economy that continues to grow and evolve.

But, before investing in a STR property in New Zealand, you must run an Airbnb data analysis to get a better overview of the rental markets that you can target and determine the profitability based on important key metrics.

Looking for the best place to buy a rental property in NZ? In this article,  you will find the top cities for short-term rental investments in New Zealand with their Airbnb metrics. We also feature some advantages of investing in real estate and its legality in NZ!

Why Invest in a Rental Property in New Zealand? 

It’s a given fact that New Zealand is a haven for nature and adventure lovers. Moreover, it has been enjoying positive economic growth lately. Thanks to these points, this country has become a magnet for visitors and investors alike.

Here are the top reasons why you should invest in a buy-to-let property in NZ:

  • TOP SHORT-TERM RENTAL MARKET IN OCEANIA

Short-term rentals are a solid contributor to New Zealand’s economy and help locals earn a nice supplementary income amidst the rising living costs. According to Airbnb’s 2019 report, over 40% of international visitors stayed at an Airbnb in New Zealand! Moreover, New Zealand’s cities like Auckland and Queenstown became the top trending travel spots for 2022 and 2023 international travel.

Besides, New Zealand also ranks among the top STR markets in Oceania. So if you’re aiming to cater to short-term accommodations, New Zealand is a great choice. 

  • STRONG REAL ESTATE & RENTAL MARKETS

Another advantage of buying a property investment in NZ is its property market since it has experienced steady growth in the past few years. The demographic increase, resilient economy, and favorable tax structure are major factors that contributed to the housing market growth and its value appreciation. 

The rental market in NZ is strong considering its thriving tourism & business industry that allows the properties to generate a consistent cash flow and attractive rental yields. Digital platforms such as Airbnb and VRBO have gained a lot of popularity and have become a vital contributors to the country’s economy.

  • NEW ZEALAND OWNS A STRONG TOURIST MARKET

New Zealand is an attractive country that draws millions of tourists yearly. As one of the most fascinating destinations to visit, it ranks high when it comes to tourism! This island country welcomed around 1.4 million tourist arrivals in 2022, with an increase in international visitors. Moreover, visitor arrivals are forecast to reach 5.1 million by 2024, according to the MBIE.

Considering that New Zealand presents plenty of touristy towns and cities, listing a property can become a profitable business for investors.

  • A HIGH DEGREE OF ECONOMIC RESILIENCE

With a strong and resilient economy, New Zealand has proven its stability even in the face of global economic challenges like the COVID-19 pandemic. The country relies heavily on international trade, tourism, and agriculture. However, it has been presenting an increasing economic diversification in recent years that contribute to the real estate market’s attractiveness with lucrative opportunities.

Expectations When Buying a Property in New Zealand

Aside from the pros of buying an investment property in New Zealand, let’s discuss some cons so you can know what to expect when investing and living in this country. It’s always better to look at the two sides of each coin to properly set your expectations!

  • REAL ESTATE’S AFFORDABILITY AND COMPETITIVENESS

While NZ’s real estate market enjoys consistent growth, it also has downsides, and not everything can be rosy. If we take a look at the average housing market value of different cities in New Zealand, we can find that most of them are not budget-friendly. 

Thus, finding an affordable property can be quite a challenge if you have a limited budget and if you find one, you may need to invest plenty of time and money in renovating it. Living expenses and rent can be fairly expensive as well.

  • NEW ZEALAND IS PRONE TO NATURAL DISASTERS

Due to its geography and location, this island country is prone to natural hazards, particularly earthquakes, flooding, tsunamis, and volcanic eruptions. Despite the country’s strong building codes, the potential occurrence of such events can still affect both infrastructure and investments.

Is Airbnb legal in New Zealand?

Knowing Airbnb’s key metrics is important, but it’s also crucial to know about the Airbnb legality in the city you want to invest in. Broadly speaking, Airbnb is legal in New Zealand! 

Yet, you should check out the NZ local council’s short-term rental rules since some areas need you to register your properties and get resource consent. Additionally, owners should ensure coverage for short-term rentals and guarantee that their property is devoid of any potential dangers that might lead to accidents or injuries.

Moreover, since the Residential Tenancies Act general rule doesn’t apply to holiday lettings, landlords should create a rental agreement to cover both the owner and the renter. 

Property managers are also liable to tax on income received for providing short-term accommodation in NZ. Goods and services tax (GST) rules apply if your turnover is over $60,000. Hence, you’ll need to register for and file GST returns.

Best Place to Buy a Rental Property in NZ: Top STR Markets

New Zealand presents great investment prospects to property investors, but there’s still a major doubt: where should you invest in real estate in NZ? 

To figure out the best cities and towns for short-term rental investments in this country, we used Airbtics’ calculator and filtered 2-bedroom properties to find out the top 13 markets:

airbtics-logo-300x87
Location Airbnb Listings Airbnb Annual Revenue Occupancy Rate Median Property Price (2 BR) GRY
Queenstown 1,460 $53,472 83% $690,000 7.75%
Wellington 720 $46,694 94% $499,000 9.36%
Auckland 2,292 $42,408 95% $429,000 19.89%
Nelson 365 $38,105 95% $629,000 6.06%
Christchurch 923 $35,378 95% $415,000 8.52%
Hamilton 270 $33,672 92% $569,000 5.92%
Napier 356 $32,103 71% $450,000 7.13%
Gisborne 174 $31,863 83% $440,000 7.24%
Tauranga 279 $31,122 80% $539,500 5.77%
New Plymouth 278 $30,132 78% $495,000 6.09%
Rotorua 469 $29,616 74% $459,000 6.45%
Taupo 589 $29,130 64% $550,000 5.30%
Dunedin 337 $27,172 75% $470,000 5.78%

Location

Airbnb Dataset

  • Total Number of Airbnb Listings: 1,460
  • Airbnb Annual Revenue: $53,472
  • Occupancy Rate: 83%
  • Median Property Price (2 BR): $690,000
  • Gross Rental Yield: 7.75%
  • Total Number of Airbnb Listings: 720
  • Airbnb Annual Revenue: $46,694
  • Occupancy Rate: 94%
  • Median Property Price (2 BR): $499,000
  • Gross Rental Yield: 9.36%
  • Total Number of Airbnb Listings: 2,292
  • Airbnb Annual Revenue: $42,408
  • Occupancy Rate: 95%
  • Median Property Price (2 BR): $429,000
  • Gross Rental Yield: 19.89%
  • Total Number of Airbnb Listings: 365
  • Airbnb Annual Revenue: $38,105
  • Occupancy Rate: 95%
  • Median Property Price (2 BR): $629,000
  • Gross Rental Yield: 6.06%
  • Total Number of Airbnb Listings: 923
  • Airbnb Annual Revenue: $35,378
  • Occupancy Rate: 95%
  • Median Property Price (2 BR): $415,000
  • Gross Rental Yield: 8.52%
  • Total Number of Airbnb Listings: 270
  • Airbnb Annual Revenue: $33,672
  • Occupancy Rate: 92%
  • Median Property Price (2 BR): $569,000
  • Gross Rental Yield: 5.92%
  • Total Number of Airbnb Listings: 356
  • Airbnb Annual Revenue: $32,103
  • Occupancy Rate: 71%
  • Median Property Price (2 BR): $450,000
  • Gross Rental Yield: 7.13%
  • Total Number of Airbnb Listings: 174
  • Airbnb Annual Revenue: $31,863
  • Occupancy Rate: 83%
  • Median Property Price (2 BR): $440,000
  • Gross Rental Yield: 7.24%
  • Total Number of Airbnb Listings: 279
  • Airbnb Annual Revenue: $31,122
  • Occupancy Rate: 80%
  • Median Property Price (2 BR): $539,500
  • Gross Rental Yield: 5.77%
  • Total Number of Airbnb Listings: 278
  • Airbnb Annual Revenue: $30,132
  • Occupancy Rate: 78%
  • Median Property Price (2 BR): $495,000
  • Gross Rental Yield: 6.09%
  • Total Number of Airbnb Listings: 469
  • Airbnb Annual Revenue: $29,616
  • Occupancy Rate: 74%
  • Median Property Price (2 BR): $459,000
  • Gross Rental Yield: 6.45%
  • Total Number of Airbnb Listings: 589
  • Airbnb Annual Revenue: $29,130
  • Occupancy Rate: 64%
  • Median Property Price (2 BR): $550,000
  • Gross Rental Yield: 5.30%
  • Total Number of Airbnb Listings: 337
  • Airbnb Annual Revenue: $27,172
  • Occupancy Rate: 75%
  • Median Property Price (2 BR): $470,000
  • Gross Rental Yield: 5.78%
Explore More Profitable Locations in New Zealand!

A Guide to Finding Potential Airbnb Rental Markets with Airbtics

Identifying promising rental markets can be a time-consuming endeavor. That’s why it’s wise to leverage advanced resources available to property investors to hasten this process.

First, go ahead and explore real estate forums and conduct research on search engines to discover which locations are piquing significant interest among investors. This approach will allow you to sort your list. You should also utilize analytical tools to identify profitable STR markets, especially those that provide dynamic data.

Airbtics Dashboard allows users to explore a city and gain valuable insights to simplify their investment research. This dashboard provides users with precise data sets that showcase metrics such as average revenue, occupancy, nightly rates, seasonality, and more.

best place to buy a rental property in NZ

Sometimes, your target location might not appear in the search results, but you can easily create your own custom market.

Now that you have a clearer perspective of your target market. Feel free to experiment with the filters to identify the results that fit your needs. You can use filters to find what type of property offers the most appealing profit in your chosen area. 

One of the greatest advantages of dynamic data is that if you move and zoom in and out of your map, the data will also change accordingly.

You can repeat this process until you find which property type makes a sound investment choice in your target area. By comparing data across various property types, you can pinpoint the option that aligns best with your preferences and goals.

Maximizing Returns: Navigating New Zealand’s Real Estate Opportunities with Informed Insights

best place to buy a rental property in NZ

New Zealand is a destination of significant tourist importance and features a resilient economy and a strong real estate market. Additionally, most New Zealand cities can generate good rental yields and a nice stream of passive income that presents appealing opportunities for property investors. Yet, investors with a limited budget may avoid major urban areas in New Zealand as living costs and housing values can be quite expensive.

While there are many profitable cities and towns in New Zealand, it’s crucial to acknowledge the inherent risks associated with investing in a market without a comprehensive analysis of all relevant Airbnb KPIs. Therefore, it is recommended to conduct thorough market research using short-term rental analytics tools for accuracy like Airbtics since it can help investors and hosts to make data-driven decisions. Living in a digital era with limitless possibilities and benefits that simplify decision-making, we encourage you to take advantage of it to unveil the profitability of your chosen market in New Zealand!

Explore More Profitable Locations in New Zealand!

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