An opportunity to secure attractive investment yields at affordable prices.
1 June 2019
As Christchurch continues to rebuild and recover from the 2011 earthquakes, affordability (and with that attractive rental yields), rising rental rates and likely capital gains in the medium to long term, make a strong business case for residential property investment in the South Island’s largest city.
Key “Anchor Projects” within the central city continue design & construction, whilst others are now complete. Private sector developers and investors continue to build and invest in numerous retail, hospitality, multi-unit residential, commercial offices and hotels within the central city.
Christchurch’s median house prices have remained consistent since 2015. The realisation that Christchurch’s rebuild was going to take longer than initially thought and the high levels of attractive growth in Auckland, Hamilton and Queenstown meant that growth in Christchurch’s median house prices stagnated. Progress with the rebuild still continued, but very much “out of the media spotlight”.
Comparing long-term growth with current median house prices shows an ever increasing gap, which in turn has increased the relative affordability of Christchurch versus other major cities in New Zealand and Australia. As the rebuild progresses over the coming 5 years, as the property cycle once again enters a growth phase and as pressure for short-term median house price growth returns to its long term trend line, the opportunity for strong capital gains in the city will return. But for now, there is an opportunity to take advantage of lower prices.
“Sales for investment properties in Christchurch are currently very strong. Given the relative affordability of Christchurch versus other major cities in New Zealand and record low interest rates, investors can achieve attractive cash-flow outcomes in the short term as they hold properties for capital gains in the medium to long term.” says Andrew Nichol of OPES Partners.
Nikki Connors Principal of Propellor Property Investments says, “Over the last 10 years I encouraged my clients to invest in Hamilton property. I was absolutely correct in my prediction and this resulted in significant profits for them all. Today, I am just as passionate about Christchurch and the significant medium term capital gains in this region can offer my clients. With the right property and right financial strategy I am confident that Christchurch investment property can outperform most regions of New Zealand.
Rental rates in Christchurch increased greatly following the earthquakes of 2011 as the demand for rental properties outstripped supply. In 2015 rental rates declined and then stagnated. Recently rental rates are once again increasing.
Trade Me’s Head of Rentals Aaron Clancy says, “the demand for rentals is very high right across the country and, in most places supply is not keeping up. And that in Christchurch, there has been a surge in demand for rentals and the median weekly rent has gone up by 1.2% year-on-year to $405 in March”.
Back in 2010, local property developers and investors Mark Revis and Jedd Pearce of PLC Group, purchased 41,000 SQM of land and associated Maltworks in Christchurch’s Heathcote Valley with a plan to re-gentrify the area as residential housing and an aged-care facility.
Mark explains, “While being only 12 minutes drive to the CBD, the natural beauty and amenity of the surrounding Port Hills is a mecca for mountain bikers with numerous trails climbing to the top and rewarded with either fast or daring downhill sections for the even the most experienced enthusiasts. The Port Hills provide a natural shelter belt from the renowned Christchurch easterly winds, creating its own micro-climate and ideal growing conditions for gardens and horticulturists. Within a short 5 minute drive from the Maltworks is the Ferrymead shopping complex, complete with supermarket, hardware stores, cafes, restaurants, and banks. Travel through the tunnel and you find another world in Lyttelton harbour with its busy port, recreational water activities, historic homes and popular Saturday market. There is a myriad of other amenity in close proximity to Heathcote, including the Tannery boutique retail centre, Sumner Beach and esplanade for a romantic walk, sailing or kite boarding on the Estuary, or hitting the waves for a surf at Scarborough Beach or Taylors Mistake.”
The Maltworks Terraces consists of 28 two-bedroom, two-bathroom townhouses and carparking, and 12 two-bedroom, one bathroom villas with an internal access garage. All townhouses and villas are modern and contemporary in design, set amongst a large park like greenspace and orientated to maximise sunlight.
There is a number of factors why Maltworks Terraces is an attractive opportunity for investors:
1. A local developer with a strong, proven track record delivering quality projects in and around Christchurch.
2. Efficient and proven floor plans with two separate bathrooms and large wardrobes ideal for attracting stable and high quality tenants and achieving strong rents.
3. Units for sale at an affordable price point translating into attractive investment yields.
4. Strong ongoing tenant demand and rental rate increasing for new, well insulated properties built to 100% of the NZ Building Code.
5. Immediate Equity from discounts against registered valuation offered on initial units sold, before sales prices are increased.
6. Excellent depreciation for brand new properties.
7. Potential for strong capital gains as the Christchurch rebuild progresses and the local population increases through the next property cycle.
To find out more about this exciting opportunity, please contact
OPES Partners (0800 676 737),
Propellor Properties (0800 81 81 91)
Property Ventures (0800 697 767)