Welcome to our guide on understanding the property cycle in New Zealand! The property market in New Zealand, like many other countries, operates in cycles, characterised by phases of Recovery, Boom, Slowdown, and Slump.
Capital growth is a fundamental concept in the realm of real estate investment, representing the increase in value of a property over time. This growth is typically measured by the difference between the property's current market value and its purchase price.
Leverage is a powerful tool in the realm of property investment, enabling investors to amplify their purchasing power and maximize returns. In the context of real estate, leverage is typically achieved through mortgage financing, where investors utilize a combination of their own funds and borrowed money to acquire properties.
Yield, in the context of rentals, refers to the annual income generated from a property as a percentage of its total value. Understanding yield is essential for investors as it provides valuable insights into the profitability and potential return on investment (ROI) of a rental property.