Through a homeowner's eyes; Christchurch is a fun city laced with opportunities and well-paid job (especially in the tech sector it seems). The Garden City has had a 60 minute makeover - granted, it has taken 10 years - but its feeling almost brand new in parts, yet pivotally it’s not finished yet *hint, hint: a good time to get in*. Liveability and quality of life aren’t compromised by moving to the country’s 2nd biggest city, certainly not anymore.
Through an investor's eyes; a solid yield is still available in Christchurch whilst other main centres' price vs rental income make it hard to stack up for an investor. Capital gains are very much still to be had in the next few years - hypothetically - as the city is undervalued compared to Auckland, Wellington and even Dunedin. Being able to get both yield and gains for an investor is the secret sauce to wealth creation - buying the right product in the right location for the right price is paramount in a strategy that allows for portfolio growth.
Flow of capital
As with any market the flow of capital generally follows safety and potential for accumulation. The term safe as houses generally rings true, even post-GFC there was a short downturn then the market picked right back up - so if you’re a buy and hold investor or an owner occupier that long term strategy will generally always see you correct. Traders/speculators on the other hand, rely on playing the market - buying off plan and predicting market movements etc. It’s a strategy that can work in a hot market but in a cooling market it can be difficult. We advise our buyers to purchase and hold, thats where the long term value and wealth creation happens - not in fly-by-night buying.
We’ve noticed a definitive change in the regions we are fielding enquiry from and this may be due in part to tougher lending restrictions from the banks forcing investors and home-owners to regions they can afford. If an Auckland or Wellingtonian buyer has capital to invest but his/her own doorstep is too pricey, its time to go shopping elsewhere and Christchurch is like a half-price sale for many North Islanders so naturally the flow of capital heads South.
Christchurch as a city to live, work and play
Investors need to think about the city they put their money in - what kind of tenants are likely to live in their home? What opportunities exist for these people and what does the future of the city look like? Owner-occupiers look through the same lens really, but with a slightly different angle - their investment is where they reside so liveability for their personal situation is extremely important.
Buying a home in an ever-improving city is smart investing - Christchurch is still awaiting some big ‘anchor projects’ to up-anchor and get out of the ground - like the stadium and Metro sports facility (both started but not breaking any speed records as for progress - the tale of the public-sector rebuild). So logically the city has room for further growth, getting in during the slower times could be one of the smartest financial decisions an investor or home owner could make - if given time.
Always. Buy. Smart.
Time is the property market's best friend. They say every 7-10 years the market doubles - whether that trend will continue we don’t know but as a rule of thumb it usually correlates with world economies (cyclical) and population growth (seemingly non-stop) however, a buyer can attain a headstart by choosing a home in the right location, of the right size and of the right quality.
Property is a big investment and protecting that investment means looking at a few long-term metrics;
- Invest in a new home with a 5+ year plan. The brightline test for selling a home tax free is 5 years.
- Invest in a home that is different, better. Like people, we should all have our own qualities and character, carbon copies get monotonous - pick unique, well designed, well considered homes with liveability and resale value. The cookie cutter, mass production model can devalue - when there are literally hundreds of homes that look the same, why should yours stand out and increase in value more than the others. And you’re at the mercy of a few bad sales, investors who need a quick sale, tarnishing your investments intrinsic value.
- Invest for your liveability or your tenants liveability - your owner occupier may become an investment down the track so consider from not only your point of view, but that of a tenant. Choose a home that is attractive - looks good from the outside, works well inside.
- Ask the ‘why’? As developers we make choices based on ‘why’ - why did we build 2 or 3 bedroom homes in a certain area? Why single garaging? Why 2.5 bathrooms? Usually it is us working backwards from market demand and that is driven by demographic behaviour and site suitability. There is usually a reason we have created a certain design, so ask us. We don’t have a one-size-fits-all property that we drop on any site we find. That is not Rosefern. Our design and our planning stage is time consuming and thorough. We’re not fast fashion, we’re more couture and couture never goes out of fashion.
In conclusion, Christchurch is well insulated from the more-troubled inflationary cities. Our affordability coupled with our funky upgrade over the past decade has certainly turned the shaky city to a stable fiscal haven it would seem…how time can heal. Even as interest rates track upwards at least Christchurch values are remaining solid - protecting buyer capital and gearing up for the city to realise its inevitable future growth.
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