A dive in rental housing yields has caused investors to shy away from Auckland and its high prices, in favour of Otago, where more affordable housing offers yields more than double Auckland's.
Auckland has an asking price of $888,493 and Otago $318,897, according to the Real Estate Institute of New Zealand's website, Realestate.co.nz. The national asking price is $577,527.
Realestate.co's chief executive Brendon Skipper said Auckland's average asking prices for June rose again, to another high of $888,493, but website searches for Auckland properties had fallen more than 19%.
All real estate data in recent months has been anecdotally reporting a surge in investor interest and purchases around Otago and Dunedin.
Mr Skipper said Auckland property investors were taking a hit on their theoretical yield in the rental market at 3.18%, while ``the star performer'' in investment property was Otago, showing an average yield of 7.32%.
Mr Skipper said based on a calculation of average asking price versus weekly rental price, excluding all external costs, Auckland investors would, in theory, get 3.18%
''This puts them at the bottom of the ladder across all 19 regions,'' he said.
"By comparison, the star performer in terms of theoretical yield on investment property is Otago, showing an average yield of 7.32%,'' he said.
The data suggested Auckland investors were relying on future capital gains, rather than rental returns, or were having to look at other property types when considering their investments, he said.
Nationally, the average theoretical rental yield on a property was 3.96%.
ASB economist Kim Mundy said nationwide, the seasonally adjusted housing inventory levels hit a record low and the weeks of inventory remained "extremely tight''.
Despite new listings rising, total inventory levels were the lowest they had been since 2007, when records began, she said.
"For New Zealand as a whole, we expect low inventory levels relative to demand to keep pressure on house prices,'' Ms Mundy said.
Nationally, Mr Skipper said the volume of website traffic was comparable across the country for this time of year, but it appeared buyers were moving away from looking in the Auckland area, in favour of other regions, he said.
"Northland, Hamilton, Tauranga and Queenstown were flavours of the month,'' Mr Skipper said.
The Central Otago-Lakes area had a 4.9% asking price gain in June to $860,234, but a 4.4% decline in new listings to 172. The long-term average to sell all listed properties was 78 weeks and that is down to 13 weeks now.
Otago booked a 0.8% asking price decline for May, at $318,897 and new listings were up 3.2% at 290, while the long-term average to sell all properties was down from 26 weeks to 11 weeks.
Southland's asking prices were down 0.1% at $262,285 and new listings up 16% at 254. The long-term average of 34 weeks to sell was down to 18 weeks.
Mr Skipper said across the country sellers were coming back in the market and 15 out of the 19 regions showed an increase in new listings, compared with the corresponding time last year.
"The message seems to be getting through that with the shortage of listings and the speed in which properties are selling, it's a sellers' market,'' he said.