The July issue of NZ Property Investor reported that three of the four top Territorial Authorities for annual price growth were in Canterbury. While these figures are a clear reflection of a province “in the rebuild” and need to be kept in prospective, I think it is not unrealistic to come to the conclusion that as is Canterbury’s case opportunity and growth follows calamity.
The article makes an interesting read and was written in the context of cautioning investors to be mindful that the two big cities are unique markets in their own right, being careful not to treat this dynamic as a national trend:
In April 2014, the top four Territorial Authorities (TAs) by annual price growth were Auckland (14%), Waimakariri (8%), Christchurch (8%) and Selwyn (8%) … while the four Auckland and greater Christchurch TAs aren’t always the top four, they have consistently featured there over the last 12 months.
This suggests Auckland and greater Christchurch have their own price dynamic that is completely different from that of the rest of the country. Rather than just being the fastest-growing part of a national market, they really need to be seen more as a market on their own, with their own dynamics. So long as this situation persists, national aggregate data will have to be treated with caution.
The report [the Department of Building and Housing’s quarterly update] also noted the strength of Christchurch’s rental market. It said Christchurch rents would reach Auckland levels by the end of the year on current trends.
Canterbury reported the strongest year-on-year rental growth in the year to April with average rents up 12%.
Greater Christchurch recorded an average rent of $431 per week, compared to Auckland’s $451. The national average is $374 per week, according to the DBH data.
I fully support the article’s advice of looking at the “big picture”, however I equally encourage pursuing evident opportunities. Clearly Canterbury is providing a raft of such opportunities for the astute investor – it’s time to grab the bull by its horns!