Christchurch predictions over the next 5years

[Jasonm]

Would be interested to hear what anyone has to say on Christchurch property growth over the next 5 years

[elguapo]

Would be interested to hear what anyone has to say on Christchurch property growth over the next 5 years

There won't be any.

[Nick G]

Interesting, so that would imply good buying opportunities.

[orion]

Would be interested to hear what anyone has to say on Christchurch property growth over the next 5 years

What is the point of your question Jason?
Do you want to know what people think, and come to the conclusion they are what the majority think is correct, or that they are wrong?

What then would you decide to do as far as property is concerned in Chch after hearing the opinions of others??

[MichaelKarabassis]

What I reckon will be interesting is the value in regards to inner Christchurch vs outer Christchurch/Canterbury (rangiora, kaiapoi, Rolleston, etc.)
Everyone moved out with the hit of the quake, but people seem to be trusting the move back in, a lot more these days, and trusting the hills again.


Christchurch Mortgage Adviser

[Nick G]

I like Rolleston's long term story with the industrial park and major transport investments. Council there planning for 2-3x pop increase

If there are any really good areas that are going to be cheap (or flat for a few years and becoming cheap) then take a good look at them. Large city, huge investment in infrastructure, industry and export hub, universities...

In the immediate term, take a look at the impact of "as is where is" homes on the rental market and make sure you'll be able to cover costs.

[andyp2010]

I reckon it'll be a rough ride for most if not all.

The building companies have over built, over staffed and overbought assets, especially big expensive utes on lease etc, the new subdivisions are half empty (or half full if we're being positive!), EQC is all but finished, the normal jobs aren't exactly flooding back but they are coming back bit by bit. I wouldn't be surprised if one or two of the big boys, Mike Greer or Stonewood get taken out by their own greed.

Interest rates are so low right now that I think it's hiding a lot of the dead wood. Nobody has any great impetus to sell for less than what they paid so everything is just hanging around for longer. Over consumption seems rife. There's a few 'late to the party' new investors coming into it, unsure how they'll fare.

In good news, if we're due for a global crash, investors in Christchurch have already dropped their rental prices and gotten used to it, in a good macro economic environment, as a new normal and therefore it will come as less of a shock.

I don't have any numbers or stats, purely based on day to day observations and local hearsay. Maybe I'm wrong but I've been very edgy since last winter, I won't be buying any time soon.

[MikeO]

Flat to moderate growth would be my pick. Maybe a flat patch if supply overshoot population but cost of building new will quite likely limit the extent of that. On the positive, Canterbury population is continuing to grow by around 10k people per year (not far off Auckland's growth rate noting we are about a third of the size). Also interest rates low and pretty much full employment. Rents are flattening but you still get a decent return in my opinion (say $400 per week for a property valued at 300k).

So in my opinion Christchurch is a good place for the long term investor at the moment.

I have no immediate plans to buy more properties but maybe in the nearish future.

[MichaelKarabassis]

Well said by all of you, and AndyP, interesting what you say about a global chch, I think you're right, some of the seasoned investors are already insuring they aren't over leveraging themselves or over charging rent to protect themselves.

For myself who invests, and my clients though, there seems to be a good number believing chch is still a very strong place to buy property.
But I have definitely seen a decrease in investment properties in the outer chch areas, with most of these purchasers being Home buyers rather investors.

[portofolio]

Agree with all of you said above. Oversupply of the new house in CHCH at present, and the weekly rental and house price drop slightly over a year. Meanwhile, the mortgage rate keeps in low for a while. The future outlook would be depend on a strong population growth, which increases the demand and push back the weekly rental and house price.

If the government encourages the Philippian workers finally to settle down in CHCH, and international students back to University of Canterbury, Lincoln University and CPIT, then it won't be a big problem. After city center has been rebuilt, everything back to its original track. We can see those would happen, besides the number of tourists from China will increase. The China Southern Airline from Guang Zhou to CHCH brings more tourists to CHCH.

I may buy properties in CHCH in recent two or three years, if the city rebuilt speeds up and population grows or a significant drop in property price.

CHCH property price has a long term (since 1996) annual growth rate at around 6.8%.

[andyp2010]

Yep, theres never a boom and a gentle tailing off, its a boom and a bust.

The chinese link to chch will be great though

[MichaelKarabassis]

Do we accurately predict though that the world will always boom and bust like it always has, or has/will changing regulations or attitude or anything made a change for the better? As in, will a bust be as bad as previous busts?

[portofolio]

Do we accurately predict though that the world will always boom and bust like it always has, or has/will changing regulations or attitude or anything made a change for the better? As in, will a bust be as bad as previous busts?

I personally think that the "correction", would be very smoothly go through, rather than a sudden bust. The reason could be very complex, maybe the authority and bank lending facility still remember the lesson from 2007, investors suffered before become more sensitive nowadays and well prepared for the "correction". The key support is the low mortgage rate environment and it will keep for a while. I do not think it would be a major or big correction occur.

Anyway, we need demand for house and population to go through this gentle correction. Not painful, even we cannot feel it for two or three years.

[Damap]

Unless you live there the real question is why would you bother buying there. It is arguably more risky than most other cities in New Zealand and is highly speculative. if you're a local then of course that's different but if you just want somewhere to invest go north young man. Tauranga, Hamilton, Palmy are all safer in terms of future EQ issues and uncertainty about rebuild quality and repatriation.

[MikeO]

Unless you live there the real question is why would you bother buying there.

Because it is NZ's second largest city..? Comes with a few advantages.

By repatriation do you mean an exodus of Phillipinos post rebuild? Highly unlikely in my opinion (at least based on those I have met). They love it here. They work hard are very versatile and I am pretty sure they will have no problem finding work in the future. Rebuild will wind down but I'm picking a gradual wind down, not a bust.