Today here in the Griff camp our 28th “as is” sale has been confirmed and the demand for these homes continues. So why the demand and who is buying these damaged uninsured homes? Some would say it doesn’t make any sense that people would want them, while others just can’t get enough!
The bottom line is they are cheap and the average Kiwi struggles to let a bargain go unnoticed. The following should provide a reasonable overview of why this current demand is continuing.
Affordability: Apart from the obvious as stated above, the affordability provides a double assurance and protection for the future when rents firm up. It has been so rare in Christchurch in the past to get cash positive investment properties.
Cash cows: with acquisition costs low and rent returns high the maths is simple – more money in with less money out (costs) leaves you with profit!
Rental demand high: Never have I seen such high demand for rentals in Christchurch and it looks like it will continue in the short to medium term yet (5-10yrs).
Returns/yields up: The same as the above – low supply and high demand will always drive up rents.
Short term rentals: Currently insurance companies are happy to pay motel rates for clients while their home is being remediated.
Fully furnished: Premium (motel rates of $175-$220 per night) are being paid for fully furnished accommodation, however a word of caution, the insurance accommodation benefits that clients have are not open ended and while these budgets cover short term repairs with ease it is likely that the budgets will remain the same or similar for longer repair periods, but time will tell.
Every man and his dog in town: With so many tradies and professionals in town, they all need somewhere to lay their weary heads at night. I actually think a lot will look to stay on once the rebuild is completed (not that that will happen over night!)
Christchurch is the place to be: even after the rebuild, while probably not cheap it will unquestionably be a great and modern city to live in.
A captive market: currently sitting at 270+ our current e-database for “as is” specific purchasers continue to say “keep ’em coming”!
Credible property info: Insisting on engineer’s reports often wins the day and creates confidence for purchasers to proceed well informed.
Mum and Dad buying for the kids: A great way to affordably provide a leg-up for the kids – one home sold last week was a delightful wee honeymooner’s nest!
I could go on, but how much convincing does one need? The odds are stacked well in favour of the purchaser and while they are not for the risk averse they are proving popular for the property savvy, investors and young entrepreneurs.
Whether you have a damaged home to sell or looking to launch out into the investment market and could do with some practical advice, don’t hesitate to make contact, we are here to help.