Short term rentals (STR) also known as holiday rentals, have become increasingly popular in recent years as more and more travellers seek out unique and authentic experiences when they travel. New Zealand, with its stunning natural beauty, unique culture, and diverse range of activities, is an ideal location for STRs. Here are some reasons why there has never been a better time to invest in STRs in New Zealand:
1) Strong Tourism Industry
Tourism is a major industry in New Zealand, and the country is known for its warm hospitality and welcoming culture. In 2019, over 3.8 million international visitors arrived in New Zealand, and the government has set a target to increase this number by 41% by 2025. This means that there will be a growing demand for STR as more visitors look for unique and authentic accommodations during their travels.
2) Growing Demand for STRs
Thanks in part to the rise of online booking platforms like Airbnb and Vrbo, STRs have become increasingly popular in recent years as travellers look for accommodations that offer more space, privacy, and flexibility than traditional hotels. In New Zealand, STRs are particularly popular among families, groups of friends, and adventure-seekers who want to explore the country’s stunning natural beauty.
3) High Occupancy Rates
The occupancy rates for STRs in New Zealand are generally high, particularly in popular tourist destinations like Auckland, Tauranga, Wellington and Queenstown. This means that there is a good chance that your property will be occupied for most of the year, and you can expect to earn a steady income from your investment.
4) Strong Rental Returns
STRs can offer strong rental returns compared to long-term rentals or traditional investments like stocks and bonds. In New Zealand, the average nightly rate for a STR is around $200-$300, and occupancy rates can be high during peak season.
5) Opportunities for Capital Growth
Even though we have seen a downturn in the property market over the recent months, over the long term New Zealand has experienced steady growth, and there are opportunities for capital growth in the STR market as well. By investing in a property in a popular tourist destination, you can potentially benefit from increasing property values as well as strong rental returns.
6) Growing Interest in Eco-Tourism
New Zealand is known for its beautiful natural landscapes and eco-tourism opportunities. This has led to growing interest in sustainable and eco-friendly STR properties.
7) Lifestyle benefits
Owning a STR property can provide lifestyle benefits, such as the ability to use the property for personal holidays while also generating income when not in use.
The STR market in New Zealand presents a compelling investment opportunity for those seeking to capitalise on the strong tourism industry, high demand and occupancy. With increasing awareness and growing popularity of STRs, investors can expect strong rental returns and potential long-term growth. Additionally, the lifestyle benefits of owning a STR property provide a unique opportunity to enjoy personal holiday while generating income. Overall, the STR market in New Zealand presents a compelling opportunity for investors seeking to diversify their investment portfolio and tap into the growing travel market.
