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Why Buying Christchurch Property Makes Perfect Sense For Owner-occupiers or Investors.
Anthony Patrickson
October 19, 2021
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Why Buying Christchurch Property Makes Perfect Sense For Owner-occupiers or Investors.

Ahhh Otautahi. The Garden City, the gateway to the South Island, the 2nd biggest city in New Zealand and now it appears, the target of savvy property buyers nationwide. Now let’s preface this article a little. This is not sponsored by Christchurch Tourism nor is it an advertorial but it has been written by a Christchurch aficionado and director of Rosefern Homes (Ant Patrickson) so forgive me if I’m a little biased about the city I now call home but it has truly captivated me in the decade since moving here from the Uk, something I’m sure it has done to many overseas and domestic migrants. I’ll break this article down into two vital parts. Property investors are smart, and homeowners are emotional but both look at the same two main metrics when parting with their hard-earned capital to buy a home. Affordability and Liveability.

Liveability

 

Christchurch has forged an incredibly strong identity in recent times.Sheer resilience intertwined with a very Southern dose of humility defines the rejuvenating city.  

 

The 2011 earthquake sequence changed the cityscape forever. But in trueCantab fashion, the disaster was face head-on and the city began picking up the pieces and building from the rubble. Red tape and insurance issues slowed the pace in the early years but take a stroll around central Christchurch today and you’ll see a city reborn. Old fragile stock replaced with gleamingly new, seismically strong, consciously built, efficient buildings to suit the newest city on the planet. How many cities get the chance to reboot so much of their infrastructure to suit the needs of the modern world? Yes, we lost some landmarks and some heritage but the city’s heart is beating again now and its reputation as the shaky city is almost but a memory.

 

With over 1000 parks, 15 golf courses, 2143 hours of sunshine each year, a bustling hospitality scene and some of the best damn street art in this hemisphere it’s not hard to seethe attraction of Christchurch for people of all ages. A KPMG report back in2016 identified Christchurch as a ‘magnet city’ which means it has a gravitation pull attracting young wealth creators and disruptors. And the magnetism seems to be getting stronger and stronger. With a median age of 37, two universities and one tech college it is an attractive move for young people. 

 

It’s 26% more affordable to rent in Christchurch than in Auckland and as one of the top 5 investment cities for tech in the world The Garden City offers a youthful talent pool, something employers are identifying as a bonus alongside the cheaper commercial rents and employee lifestyle/affordability. 

 

This city offers lifestyle and charm in abundance. The two defining characteristics being; natural beauty and urban regeneration. Nowhere is this duality more perfectly juxtapositioned than with a calming punt down the stunning Avon river on a sunny Chch day as you gaze upon the newly builtRiverside Market eateries and Terrace bars whilst watching the city revellers eat, drink and be very merry. Wherever you are in the city, peace and tranquillity is never far away. Hagley Park, the Christchurch answer to NewYork’s Central Park is lodged in the central confines of the 4 Avenues that frame the picturesque city. 

 

A (hypothetical) day in Chch…

 

What better way to start a weekend with a stroll through the BotanicalGardens, stopping off for a flat white at the stunning Arts Centre as you re-enter the city’s urban heart. Maybe the rest of your day is spent at Sumner Beach catching a few waves or maybe it’s hitting the snow slopes of Mt Hutt - or maybe it’s both...how many cities can you snowboard and surf in the same day?Pretty special huh. As New Zealand’s most walkable and bike able city, it’s an easy place to get around. Go by bike to the Adventure Park for a thrilling mountain bike experience or cycle the kids to the Margret Mahey playground which is as fun for adults as it is for the kids! Or maybe you like to get outa little further. Christchurch is the ideal location to slingshot back and forth to some stunning destinations just a few hours drive away. Swim with dolphins in Kaikora, visit the French township of Akaroa or relax in the thermal waters of Hanmer Springs. All within a few hours from Christchurch. Not to mention the local wineries that make the ideal summer hangout spot. 

 

The city has a lot going for it. And without wanting to sound like a travel agent on commission, it’s a great place to live. When investing in property in a new area, it’s paramount to know why people move to, and stay in a city. This is equally important for investment properties as for the owner-occupier home. Personal quality of life and tenant quality of life are paramount and if the city and its opportunities are good, then there will be more demand/influx of people/buyers. Those simple metrics solidify a solid reason why Christchurch as a city is a good place to live (therefore invest/own property). 

 

 

Affordability 

 

The Government spent $40 billion on the earthquake recovery and as ChristchurchNZ spearheads the CEDS(Christchurch Economic Development Strategy) the city marches forward to a solid road map of growth and prosperity. 

 

This growth has a knock-on effect. 

 

Internal migration has been strong in recent years as the enviable eyes of First Home Buyers and Investors alike ogle the 2nd biggest city’s affordability levels for housing. Approximately 20% undervalued and almost half the price of Auckland, it’s clear to see why Christchurch’s property market has fast become a head-turner. It boasts the highest yields out of any of the main centre’s and coupled with new, improved housing stock the city has become the shopping centre for savvy buyers wanting to get on a foot on a quickly escalating market. 

 

It’s a market that seems to be experiencing a double-bounce right now.Whilst the rest of the country experienced sustained periods of growth from2010 onwards, Christchurch was in recovery mode therefore the prices stayed rather flat (and the sale prices were a lot lower due to the unique ‘as is where is’ market which allowed owners to keep insurance proceeds and sell their homes damaged and uninsured). The post-covid economic recovery of New Zealand and historically low interest rates have turbocharged the Christchurch catch up.Nationally, from August 2020 to August 2021 the median house price is up 25.5%to a whopping $850,000 according to data from REINZ

 

Median House Prices:

 

Auckland: $1.2m

Wellington: $875,000

Christchurch: $619,000

 

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First Home Buyers/Owner Occupiers

 

For the first home buyer, Auckland and Wellington housing is in many cases unattainable even for DINK’s (double income no kids) without serious help from intergenerational wealth - otherwise known as the bank of Mum and Dad. New homes are incredibly expensive for something with a decent floor area or a good location and the subsequent mortgage that follows the purchase is more of a ball and chain than a sense of freedom. It’s clear to see why the youthful migration is occurring to Christchurch where housing is affordable, opportunities are plentiful and lifestyle is still very attractive. We have seen this occurring over the past few years and since the pandemic, there appears to have been a global realisation that working from home is actually wholly feasible and being located in the busiest most expensive city is no longer a pre-requisite of landing that dream job. 

 

Investors

 

Investors and first home buyers often fight for the same stock.Entry-level housing is the first rung on the ladder for FHB’s and also provides the best yield for the investor. Essentially for the Auckland investor, it’s buy-one-get-one-free in Christchurch as their money goes twice as far compared to buying on their own patch. It’s quite the price disparity considering the opportunities and job prospects in Christchurch are growing substantially. 

 

We are seeing a pattern of the soon to be retiring baby-boomer generation, armed with banks of equity from a solid run of capital gains from the North Island looking to reinvest for their retirement and make their money go further. Christchurch meets their affordability criteria, the yields are very attractive and there’s a good chance of future capital gains as the city becomes more popular. With new builds only having a 5 year bright line test after which capital gains are free from income taxation laws, the obvious choice for the well-heeled baby-boomers to further their portfolios is to shop for a new build in Christchurch!  

 

It’s safe to say both the investors and first home buyers are looking at the Christchurch market as a smart place to invest or nest. The improving housing stock and solid population growth ensure the longevity of their investment in the regenerating city. As the city’s anchor projects and the central city rebuild continue to drum up national and international media acclaim the residential housing stock will become more sought after. Obviously, we have a slight bias toward this city as I mentioned in the beginning, but we encourage you to come and take a look at our city. You will be impressed and ready to invest! 




 

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