Capital growth calculator
Project the future value, capital growth and equity position of any New Zealand investment property over your chosen investment horizon.
Understanding capital growth and equity
Capital growth is the increase in a property's value over time. For New Zealand residential investment property, long-run capital growth has historically averaged around 7% per year nationally, though this varies significantly by location, property type, and market cycle.
Understanding projected capital growth helps investors assess whether the long-term return justifies the holding costs and upfront capital required. A property with modest cashflow but strong growth fundamentals may still represent a compelling investment over a 10 or 20 year horizon.
Equity is the portion of the property you effectively own - your deposit plus any capital growth accumulated over the investment period. On an interest only loan, equity builds entirely through capital growth rather than debt reduction, which is why growth rate assumptions have such a significant impact on long-term returns.
The return on deposit metric shows the power of leverage in property investment. By borrowing to purchase an asset, you capture growth on the full property value while only committing a fraction of that value as cash. A 5% annual growth rate on a $700,000 property generates returns on your deposit that significantly exceed what that same cash would earn in most other asset classes over the same period. This calculator compares your assumed growth rate against the NZ long-run average of 7% so you can see the impact of different scenarios side by side.