Property Investment
10 min read
In 2026 the strongest area to invest in New Zealand is Auckland. That’s based on house prices, rental returns, and population growth according to Ed McKnight, Opes Partners’ resident economist.
Mackenzie and Central Otago Districts are among the weakest areas to invest.
But that’s only the headline. Property investors don’t just want to know what we consider the #1 area. They also want to know how their area stacks up.
So, in this article, you’ll learn how all 67 council areas in New Zealand rank based on where he sees the strongest investment opportunities today.
Each area has been sorted into one of five groups:
🟢 Green – Strong investment potential
🟢 Leaning Green – Worth keeping an eye on
🟡 Yellow – Neutral
🔴 Leaning Red – Less attractive
🔴 Red – Not recommended
Of course, not everyone will agree with every ranking. Good. That’s the point.
Leave a comment below and let’s have a good discussion about how you see the property market in New Zealand.
This ranking uses Opes Partners’ internal overvalued/undervalued model.
First we compare each area’s prices with where we’d usually expect it to be compared with the rest of New Zealand.
For example, if an area is usually 1.2x as expensive as the New Zealand average, but right now it is 0.9x the price, then it’s considered undervalued.
We also look at the median sale price and the average rents in an area, using data from REINZ and Tenancy Services. That way we can estimate the relative rental return you might get in different areas.
Our economist then uses expert judgement to weigh those factors and decide whether each area sits in Green, Leaning Green, Yellow, Leaning Red, or Red.
The green areas are the ones we feel most confident about.
That confidence comes from a combination of factors, including where the area sits in its property cycle, how affordable the properties are, and how quickly the population is growing.
These areas tend to be the most undervalued parts of New Zealand.
When we say a region is overvalued or undervalued, we mean compared with where its house prices usually sit over the long term.
If prices are lower than where we’d expect them to be, that can suggest a buying opportunity.
Now, they’re not always the cheapest or highest yielding parts of the country.
But these are often the places where you’re more likely to find a mix of affordability and yield.
One of the areas we have the most confidence in right now is Auckland.
Auckland property has significantly underperformed over the last 10 years in terms of property price growth. I don’t think it’s likely that Auckland will continue to lag behind over the long term.
I see Auckland at a similar point to where Christchurch was in 2019. Christchurch had been through several years of underperformance before experiencing a period of catch-up growth.
My view is that Auckland could experience a similar phase of catch-up growth over the medium term.
The “Leaning Green” areas are the ones I’m keeping my eye on. I’m not in love with them (yet).
We can see positive attributes and opportunities there, but we're not yet at the point where we're piling in. They don't quite make it onto our list of highest-conviction locations.
These areas tend to be on the undervalued side. But they might still be on a downward trajectory in their property cycle.
A good example of an undervalued area is Wellington City. I see Wellington City as incredibly undervalued.
However, Wellington has been through an enormous period of house price growth followed by substantial price declines.
Some parts of Wellington are still experiencing falling house prices, so I think it may take a few years before the market is ready for a period of catch up growth.
The “Yellow” areas are ones in the middle. They’re not the best. But, they’re not the worst either.
You’ll notice a few areas have good data. But, they’re still a “Yellow”.
These markets sit somewhere in the middle. We continue to monitor them to see whether they move into the leaning green category or the leaning red category over time.
It's important to note that this doesn't mean buying a property in one of these areas is automatically a bad decision.
Lower Hutt City is an example of a yellow area. Properties there are relatively cheap. It has a reasonable yield and it’s becoming more undervalued.
Those are good numbers. But this ranking is about where we see the greatest opportunities relative to other parts of the country.
Lower Hutt property prices boomed in 2016-2020, and then again from 2020 to 2022.
So I don’t think it’s likely that another boom is around the corner in the medium term.
The “Leaning Red” areas tend to be cheaper areas with high yields. But, they’re also very overvalued.
If they weren’t so overvalued, they’d probably be at the top of my “Green” list.
Remember, an area is overvalued if property prices in the region are higher than what we’d expect them to be.
It means there may be investment opportunities in other areas. But if you like to renovate or are investing for cash flow, these places could still be a go-er.
After the Global Financial Crisis, Auckland experienced a strong boom between 2012 and 2016.
Then the Reserve Bank introduced stricter LVR restrictions in 2016. Investors needed larger deposits to buy in Auckland compared to the rest of the country.
As a result, many investors shifted their attention to the regions. This surge in demand created a regional property boom and pushed prices significantly higher in many smaller centres.
Then came the COVID boom. Interest rates fell sharply, creating another wave of growth. Many regional markets effectively experienced two booms one after the other.
In some places, like Whanganui, house prices tripled in the span of 6 years.
Although prices have since pulled back, my view is that if an area has already experienced two major booms in a row, it is less likely to experience another significant boom in the near future.
My “Red” areas are places that have the trifecta of bad data. They’re expensive, have low yields and are overvalued.
That doesn’t mean that every property in these areas is bad. It just means that if I was looking for a good deal, I wouldn’t start here.
Red areas are the markets where I have the least confidence.
In some cases, this is because they appear exceptionally overvalued. A good example is the Mackenzie District.
In other cases, house prices are very high relative to local rents and incomes.
Thames-Coromandel is a good example. It has one of the lowest median incomes in the country, and we see it more as a holiday-home destination than a market supported by strong economic fundamentals.
Another example is Central Otago District, which sits just outside Queenstown. While it is a beautiful part of the country, it is not an area where we currently have a high level of confidence from an investment perspective.
Here’s the full list of every council area in New Zealand.
You can use the search bar to find the areas you care about, and click through the pages to see all the areas.
A good investment area usually has a mix of strong numbers and a good story behind it.
The main things I look for are:
But no area in New Zealand gets top marks on every data point.
So, the final ranking comes down to weighing up the strengths and weaknesses, then making a judgement call about which category each area belongs in.
Queenstown is a good example. On paper, the stats don’t always look great. Prices are high and yields can be low.
But Queenstown is a tourism hotspot, people love moving there, and there is strong lifestyle appeal.
| Factor | Why it matters |
| Undervalued | Property prices are lower than expected compared with the rest of NZ. This may suggest a buying opportunity. |
| Lower prices | More investors can afford to buy there. |
| Good yields | The rental return is strong compared with the purchase price. |
| Large or growing population | More people usually means more demand for housing. |
| Higher incomes | Locals may be able to afford higher rents and future house price increases. |
| Something going for it | Tourism, lifestyle appeal, jobs, infrastructure, or migration can support future housing demand. |
A weaker investment area usually has too many warning signs stacked against it.
That might mean the area is overvalued, property prices are high, yields are low, or there is not enough long-term demand to justify house price rises.
A “bad” area doesn’t mean no one should ever buy there. It simply means the balance of risk and reward looks less compelling compared with other parts of New Zealand.
| Factor | Why it matters |
| Overvalued | Property prices are higher than expected compared with the rest of NZ. |
| High prices | Fewer investors can afford to buy there. |
| Low yields | Investors may need to contribute more money each week to hold the property. |
| Weak population growth | Less future demand for housing. |
| Lower incomes | Locals may struggle to support higher rents or house prices. |
| Little else going for it | Fewer jobs, less migration, or weaker lifestyle appeal can limit housing demand. |
For 2026, I consider Auckland, Christchurch City, Selwyn District, and Waimakariri District as the top ‘Green’ areas to invest in New Zealand.
These are the areas I currently have the most confidence in, based on their median sale prices, average rental yields, and whether each area appears overvalued or undervalued.
Some of the worst ‘Red’ areas to invest in New Zealand right now are Central Otago District, Thames-Coromandel District, and Mackenzie District.
These areas appear less attractive because property prices are high compared with the underlying investment fundamentals.
It’s also important to remember that I’m not saying that every property in a Red area is bad, or every property in a Green area is good.
Instead, they show where the strongest investment opportunities may be right now compared with the rest of New Zealand.
Resident Economist, with a GradDipEcon and over five years at Opes Partners, is a trusted contributor to NZ Property Investor, Informed Investor, Stuff, Business Desk, and OneRoof.
Ed, our Resident Economist, is equipped with a GradDipEcon, a GradCertStratMgmt, BMus, and over five years of experience as Opes Partners' economist. His expertise in economics has led him to contribute articles to reputable publications like NZ Property Investor, Informed Investor, OneRoof, Stuff, and Business Desk. You might have also seen him share his insights on television programs such as The Project and Breakfast.
This article is for your general information. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.
We’ve made every effort to make sure the information is accurate. But we occasionally get the odd fact wrong. Make sure you do your own research or talk to a financial adviser before making any investment decisions.
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