Should I use my home as short-term housing?
There’s nothing like the appeal of a quick buck to turn the public’s mind to a new idea.
After the earthquakes in Christchurch, many homeowners decided money was to be made by renting their homes out to those needing temporary housing while getting earthquake repairs. Great sums were bandied about as it seemed the insurance companies and EQC would pay any amount for accommodation. Like all good urban myths, there was a tiny nugget of truth and a lot of exaggeration.
So, six years on, is there any market for short-stay housing? I’ve heard plenty of opinions but usually not from anyone working in the field, so here is a market view from my experience:
Short stay housing and residential rental housing don’t follow the same market rules, and often when one is down the other can be up.
As has been well reported, the tenancy rental market over the past 12-months or so has been flat or declining. While Christchurch is experiencing job growth and plenty of activity in the building sectors, the number of homes available has remained static for quite a while, pushing real rental prices down.
However, there is no data on the number of homes and units available for short stay accommodation, apart from anecdotally or a quick scan through Trade Me. Motel and hotel rooms will factor in demand, and there are certainly some new motels opening that are now picking up the one and two night tourist market, and the market needs of smaller conferences.
How do you know if short stay housing is still required in Christchurch?
The first matter to consider is what is happening with immigration. Over the past few years, New Zealand has seen a turnaround from a deficit, to now very strong net migration of more than 70,000 to the end of October 2016. While we know this is impacting on housing shortages elsewhere in the country - particularly Auckland - the immediate need in Christchurch is to provide homes for those workers and families who see Christchurch as a great employment opportunity. These are the people who don’t want or can’t get accepted for a 12-month tenancy, as they don’t have any local rental or credit history. Some of these workers are here for a fixed period, so also prefer furnished accommodation that feels like a home, rather than a motel or fully stocking a house for only three months or so.
The second influence is the tourism market. Christchurch certainly suffered from being bypassed by tourists for the first two years: too many empty sites, too much disruption, not enough to do. That is now changing, and tourists are better catered for within the central city. Backpacker hostels are more heavily booked, and tourism growth is such that Christchurch Airport is building a new Novotel at present, to cover the very short stay/between flights market.
To balance that, there has been a nationwide increase in the number of “self-drive” tourists, leaving aside the concerns around that. This cohort was previously taken on tour buses with motel bookings. However, the desire to be independent extends to where they stay: longer bookings with more demand for self-catering homes.
The third influence is still the earthquake repair market. Some people are now on their third or fourth repair, and although the numbers aren’t large, the time required for stays can be three or four months for the re-do of a repair. Where a repair has now become a rebuild it can be a year before these customers can move back home. In the meantime, their accommodation is paid for.
While offering short stay housing doesn’t suit everyone’s tastes, if you have the right home in the right area, knowledge of the market, and the ability to assess legitimate customers, there is still a need to be met.
By Kim Willems