Property Investor Mag - Growth hotspot Cannons Creek Porirua

[Don't believe the Hype]

More positivity around Porirua as an investment choice. This time the low end - Cannons Creek.

http://www.stuff.co.nz/business/82334127/some-parts-of-the-country-are-still-to-reach-their-price-peak-data-suggests

Long lambasted by almost everyone as the end of the world, avoid at all costs it is now emerging as a potential hotspot.

Porirua median house prices are unreliable given the large area and huge variance in property types and suburb demographics... For this area you need to break it down into specific suburb growth - Cannons Creek, waitangirua and Ranui Heights have picked up since Jan this year and continue to be hot.

Articles like this one and the one last week on Titahi Bay auction result will likely move the herd opinion and when they take a look they'll see great value...

Add this to the fact that these areas (even fully renovated) sit comfortably under Kiwisaver limits for support and now you have First Home Buyer interest...

Now for you investors - needing 40% of $300k is about the same as 20% deposit on $600k for something in the inner ring suburbs of Wellington... So you're still able to buy an investment property but your location choice may be about to change!!

[Don't believe the Hype]

Lots of views out there but no opinions on Porirua as an investment location? Am I the only one here investing in the area?

I've never felt so alone ...

[Nick G]

I'm definitely interested and I think our clients would be too. I'll be in Wellington in a couple of weeks for about 7 days and plan to have a good drive around.

[marklowes]

Only time I've been there recently was to retrieve my stolen car.. . as I was there the criminals came back to hassle me. Patched mongrel mob wondering around. Was on some side street off champion. Police moved them on that's it, told me someone should give them a hiding! (under age to arrest i think, still twice my size).

I've spent 6+ years looking at cheap areas in welly region to get a decent yield (naenae, bad side stokes valley, East porirua) and everytime ended up buying another back in Palmy instead. In palmy i was able to get the yields without having to deal with the mongrel mob. Lower Hutt city population growth is fairly poor also. Wellington city is good, Palmy is good. Porirua I am not sure?

Agree Titahi Bay is nice and I just missed out on an asbestos roofed/clad place there which is probably worth a lot more now but would become hard to sell again once the current buying frenzy ends.

[Beano]

Only time I've been there recently was to retrieve my stolen car.. . as I was there the criminals came back to hassle me. Patched mongrel mob wondering around. Was on some side street off champion. Police moved them on that's it, told me someone should give them a hiding! (under age to arrest i think, still twice my size).

I've spent 6+ years looking at cheap areas in welly region to get a decent yield (naenae, bad side stokes valley, East porirua) and everytime ended up buying another back in Palmy instead. In palmy i was able to get the yields without having to deal with the mongrel mob. Lower Hutt city population growth is fairly poor also. Wellington city is good, Palmy is good. Porirua I am not sure?

Agree Titahi Bay is nice and I just missed out on an asbestos roofed/clad place there which is probably worth a lot more now but would become hard to sell again once the current buying frenzy ends.

Anyone know what the net yields are in porirua ?

[Don't believe the Hype]

Marklowes - Maybe that car thief was directing you to a goldmine... You should have taken a look around rather than cutting and running...

I can tell you the area has delivered for years:
Gross Yield at Purchase price: >10%
Rent growth ~ 40% or more in the past 5 years
Vacancy - near zero vacancy
Capital growth - also near ZERO up until 12-18 months ago... houses bought for $180k 18 months ago now selling for $250k (min) more like $280k

[Don't believe the Hype]

Anyone know what the net yields are in porirua ?

Porirua is a big place... i'm assuming you're meaning Cannons Creek... the below numbers are for Cannons Creek/Waitangirua/Ranui Heights:

3br houses selling for around $250-$280k renting for around $400/wk - Gross 8.3%
3br units - selling for $170k renting for around $280/wk - Gross 8.3%


At 60% LVR this is VERY VERY positive cashflow

[Nice]

I used to invest in properties in Wairoa, now I invest in Wellington.

I found the same issues in Wairoa that I would expect to find in Porirua in general - you need some bigger balls than I have to collect the rent !

[Don't believe the Hype]

I used to invest in properties in Wairoa, now I invest in Wellington.

I found the same issues in Wairoa that I would expect to find in Porirua in general - you need some bigger balls than I have to collect the rent !

my property manager in cannons creek is a 4 foot 6inch Malaysian guy... About 60 years old... The best property manager I have anywhere in NZ - the tenants all love him and when I'm with him inspecting properties old tenants will walk past and cross the street to say hi to him... I guess it's how you treat people no matter if they're paying $150/wk or $1500/wk

[Livie]

Hi

I live in Wellington and I would definitely not spend my money in Cannons Creek.

Porirua is a great little city, it has some nice areas and no so nice (to put it politely) and the people are friendly.
The Creek has high crime, gangs (Mongrel Mob the main players in Porirua) and beneficiaries. If you are keen to lose money and have tenant drama's it's the place for you.

I would suggest you look at other areas in Porirua if it is the place you want to invest.

[Don't believe the Hype]

Hi

I live in Wellington and I would definitely not spend my money in Cannons Creek.

Porirua is a great little city, it has some nice areas and no so nice (to put it politely) and the people are friendly.
The Creek has high crime, gangs (Mongrel Mob the main players in Porirua) and beneficiaries. If you are keen to lose money and have tenant drama's it's the place for you.

I would suggest you look at other areas in Porirua if it is the place you want to invest.

when was the last time you were there?

I have never had a vacancy of more than a week or 2 in over 10 years in CC across more than a dozen houses... Some tenant default but no more than in my properties in Hamilton, Dunedin or other parts of Wellington region.

This is assessment of cc is about investment potential... Current Gross yields of around 10% and the fastest capital growth in the nation as assessed by property mag... How exactly did you come to the conclusion someone would lose money investing there?

Would it it be fair to assume you have a historic bias or follow the herd?

[Livie]

Was there just the other day. As I said I live in Welly and by that I mean Porirua.

Do you actually live in the area? And know more about it than locals? From you initial post it's sounded like you wanted validation to invest in the area. I gave you my opinion.

Good on you if you are making money. I know I wouldnt spend my money there. There is a class of tenants that are in that area that don't care to look after rental properties. I've seen this in the work I do.

[donna]

Is it possible Cannons Creek is gentrifying?

I know it was a nightmare place when my cousin was a newbie primary school teacher there but that was quite a few years ago.

cheers,

Donna

[Don't believe the Hype]

Was there just the other day. As I said I live in Welly and by that I mean Porirua.

Do you actually live in the area? And know more about it than locals? From you initial post it's sounded like you wanted validation to invest in the area. I gave you my opinion.

Good on you if you are making money. I know I wouldnt spend my money there. There is a class of tenants that are in that area that don't care to look after rental properties. I've seen this in the work I do.

i do live in the area... Although not CC. I'm in and around the streets of Eastern Poriria daily - I know the place better than most I would be prepared to say.

To Donna's point the area is gentrifying - the number of renovated ex state house being sold to young professional couples is on the increase.

I agree there are gangs and an undesirable element but not a reason to write off the area... If you're concerned about the risk of undesirable tenants you shouldn't be in property as they're in every suburb... I recall a story in stuff recently about a house that was destroyed by tenants in Whitby... Oh and a P lab in Chews land in central Wellington

i disagee with your statement about tenants not wanting to look after properties... I find the exact opposite. Some of the most house proud tenants of any location I own. The trick is being able to weed out the poor tenants. It's quite easy to do just keep the property quality above the average and you'll end up with better tenants paying higher rents.

[Kbkiwi]

I wouldn't invest in cannons creek. I know someone who has 2 houses there - both with large amounts of P contamination that he had already cleaned up once before.