Where should you invest in property around New Zealand?

Whether you're looking to invest for capital gains, rental yield or because you want to own property in a special part of the country, New Zealand is a great place to look at homes for sale. But where should you buy for your specific needs? What you want will determine where you focus your search, as will your budget.

Iif you're looking for a property that will produce great returns over time, Auckland might be a great destination.

If your budget is below $1million, you likely won't be looking to buy a premium property in Auckland, where the residential house value is $1,047,179, according to QV data. However, if you're looking for a property that will produce great returns over time, Auckland might be a great destination, with a 12.2 per cent increase in median house value over 2016.

On the other hand, if you want to buy so you can take advantage of the burgeoning tourist market in the country, somewhere in the South Island like Wanaka, or in the North Island like Paihia might better suit your needs.

How can you make sure you're buying the right property?

Before you settle on a home, you need to ensure it's the right one. You don't want to spend hundreds of thousands of dollars on something that isn't absolutely perfect for your requirements. That's why buying a home in Parnell, Auckland, isn't a brilliant idea if you want to enter the property market at the lower end of the scale.

Take your list of requirements into account before you spend anything - consider things like how you want to use the property, if you'll have property managers looking after it, where the best property managers are, and what sort of tenant you'd prefer. You won't get many long-term businesspeople in your home down in Cromwell or Queenstown, just like you're less likely to get many short-stay holiday-makers in your Auckland rental.

Investments for different needs

Take your list of requirements into account before you spend anything.

Rental yield

Rental yield is the net percentage of money you'll earn from a tenant based on the average rent in the suburb and the value of the property. Take Cannons Creek in Wellington, for example, where the rental yield in 2015 was 12.5 per cent, according to the Westpac Property Investor Report.

A 3-bedroom house in Cannons Creek was valued at $257,500, and the median weekly rent was $311. For this sort of investment, however, you'd need to consider how in-demand homes in your preferred region are. Cannons Creek might not be as sought-after as Te Aro, Wellington, for example.

Low dwelling value

Know your budget when looking for a low-value property, and stick to it.

Low dwelling value houses in New Zealand are in popular places - even places with high median dwelling values - you just have to know where to look. Take Christchurch, where QV states the median house value is $494,247. If you're after a home in Christchurch East, you'll be looking at a median house value around $130,000 lower. Look in Christchurch Hills, and you should expect to spend around $160,000 more for a similar property.

Know your budget when looking for a low-value property, and stick to it.

Capital gains

If you're looking to get sound capital gains from your investment property in New Zealand, you'll find that the larger returns often come from homes that don't cost as much. Kawerau, for example, had an increase in median house value of 60.2 per cent through 2016, finishing at $176,324.

Queenstown, in similar (but smaller) fashion, increased by 31.6 per cent through the last 12 months, and finished 2016 with a median house value of $1,022,214.

If you know where to look, you can make the most of your investment. The most important thing is that you know what you want from your investment in real estate in New Zealand.