Stephen Knight

I've seen that show, Andrew.

I know they're concealing the evidence.

But because these sorts of properties typically are bought by investors rather than mum and dad who want to move in with little Jimmy and little Sally, typically these properties are valued based on their rent.

And so as the rent increases, that's when an investor would pay more for it.

Because rents tend to lag behind house price growth, I've always been of the view that they increase in value more slowly.

Now, let's talk about some of the cons though to multi-incomes because they've got some really nice benefits.

What are the downsides, Andrew?

And I know we got some good data from realestate.co.nz for the first one.

Now, to be fair, some of that difference in asking price is because we actually tend to see more home and income properties in Auckland.

And of course, Auckland properties tend to be more expensive than the average in New Zealand.

If we look at a suburb by suburb comparison about like normal property versus home and income,

it's about an extra 10% for home and income properties.

Now, if your average property in Auckland costs a million bucks or just over, add an extra 10% off and you do get to that kind of 1.15 million average that Andrew was talking about.

What are some of the other potential downsides?

And then as I mentioned before, if you are buying a property, like a block of five flats, call it,

Typically, who are you going to sell it to?

Again, it's going to be an investor.

It's going to be valued based on the rental increase as opposed to house price increases.

If I think about the average rent increase in New Zealand, it's been about 4% per year.

House price growth has been about 6% per year.