Christchurch is the ideal market for those who prefer to be counter-cyclical when they invest and in
the words of one of the greatest investors of them all...
"Be fearful when others are greedy, be greedy when others are fearful."
After the 2011 earthquake, a lot of housing was planned and built, replacing a lot of seriously low quality housing stock. Nobody in the
planning departments saw "as is where is" rentals sticking around this long, which has added to an oversupply. However, the slack is
starting to be taken up and with the re-build chugging along, many people are moving back to the city and its surroundings, embracing a new
and innovative city. My husband and I moved back to Christchurch after years in Auckland and my young family love it here.
While the city population fell post-earthquake, it has since recovered and had already exceeded its pre quake levels by June 2017. Council
projections show a steadily rising population, indeed "Christchurch City Centre" (which expands beyond the CBD) was the most
searched for location in the South Island on TradeMe property in January this year.
The latest figures from QV show
Upper end areas such as Fendalton, Cashmere and Merivale are now selling for around their 2016 CVs.
Areas still offering better value are predominantly investor-owned suburbs of Avonside averaging 12% below CV and Phillipstown of 10%
Popular suburbs such as Riccarton and Upper Riccarton are showing signs of growth, with the average buying price now sitting around 5% below
Riccarton's popularity stems from a combination of strong student demand, it is close to the University, close to Riccarton Westfield Mall,
within the Christchurch Boys and Girls High school zones and also on the cusp of the CBD and Hagley Park.
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Prices range from approximately $730,000 down to $190,000 respectively in the above suburbs with returns ranging from as low as 3.5 -4%
up to 8% (or higher if you are willing to take on large projects).
Typical yields around Riccarton, depending on property type are around 5 - 6.5%. I have just helped a buyer secure
a house here,
which is slightly cashflow positive straight away and has good immediate value-add from a bedroom conversion.
Rents are a little stagnant and growth will likely be slow in the short term, however with New Zealand's continuing high immigration (and
the government back-peddling on election promises to cut it) and rapid price and rent increases in other cities, this seems to be the
exception, rather than the rule.
Using the stats engine on the Landlords website we can compare value trends across New Zealand cities. Interestingly (despite a
post-earthquake bump in the Garden City) Christchurch has tracked Hamilton and Tauranga quite closely to date and now trail them by a
Two of the larger projects due a couple of years from now that should have a major impact on the city are:
Metro Sports facility expected to open early 2021 – this is intended to be the largest aquatic and indoor recreation and leisure venue of
its kind in New Zealand. More detail on this spectacular project here
Convention centre - the $475 million convention centre is expected to be completed in early 2020 more details here
Another exciting event to keep an eye on is the move of the Shirley Boys and Avonside Girls to QE11 Park. This rebuild is set to be the
‘ultimate campus’ for more than 2000 students. Expected opening date is term 2, 2019. Suburbs surrounding this area are mainly lower decile
and very affordable… may be a good time to explore some of these surrounding suburbs now!
If you want to buy at a low point in the cycle, with minimal competition and later enjoy the growth as the population continues to increase,
now is a great time to get into this market. Buyers still enjoy negotiating power and you can secure longer due diligence periods to really
size up the costs and probable outcomes of any opportunity.
It's not just about finding a deal, to truly grow as an investor you need to plan towards your end portfolio and work with people who can help you move towards that vision. iFindProperty has a service that achieves that for clients, and we are excited to share it with you
As an accountant is not a place for my personal political opinions, but professionally speaking I’m pleased with this result, and cautiously
optimistic we might have a friendlier tax environment for the property sector for at least a few years. But what does this mean for property