The east is rising: it’s a stock-standard cliché and a powerful headline that’s donned investment and foreign policy magazines for the past decade. But we’re not talking about China here. We’re talking about New Brighton, Parklands, Wainoni and Prestons.
East Christchurch is indeed on the rise: the evidence is in house values and rents.
Statistics from Trade Me’s Rental Price Index show that while eastern suburb rents were on average $60/week lower than the rest of Christchurch in 2013, as of July 2016 that difference was down to $2.50/week. Despite the Christchurch rental market’s loss of buoyancy, there was no substantial difference in the comparative volume of listings available over the same three-year period between greater Christchurch and East Christchurch.
That’s data that Irelands Real Estate Agents & Property Managers business development manager Caroline Ireland backs up.
“New Brighton to Southshore is stable. It’s been stable since that hit on the market, since February last year. We have had a good year-and-a-half where the market has gone down, but it’s only now that we’re starting to see some impact on these areas, with properties that are being listed after longer term tenancies. They’re having to adjust their prices to meet the market now.”
Ireland said that more rental listings gave tenants greater choices. Many rentals in East Christchurch were older stock, which meant that tenants would opt for a newer property at about the same rent price. That created opportunities for landlords who upgraded and looked after their properties. Making use of subsidies available for insulation was one way that landlords could add value in the changing market, Ireland said.
Christchurch East also shows the highest rate of growth in property values over the past two years according to data from Core Logic. While the northern and southwestern suburbs saw extraordinary capital gains in the years immediately post the earthquakes, from 2014 to 2016 Christchurch East ranked the highest growth in property values, with 8.3% compared to the city average of 6.7%.
The average value for a Christchurch East property in July 2016 was $373,972, considerably below the city average of $492,165. So with cheaper buying and comparable rents, the east stacks up as a good investment.
Regenerate projects – red zone and New Brighton
Predicting growth is a tenuous business, but it doesn’t take a crystal ball to see that Christchurch’s eastern suburbs will benefit from core rebuild projects under development at Regenerate Christchurch and through private investors/community groups.
Regenerate Christchurch – a joint Crown/Christchurch City Council (CCC) organisation established in April this year to develop plans for regeneration activities and strategies across Christchurch – has three mandated projects in its sites, and two are in the east: the residential red zone and New Brighton.
Now you could be forgiven for driving through some parts on New Brighton and not seeing the potential – there are some shabby, run-down houses, bumpy, pot-holed roads and empty lots – but those with rose-coloured lenses have been quick to capitalise on opportunity. Take for example Auckland's Jolmin Holdings, which recently received resource consent to build a $20 million apartment complex on the corner of Marine Parade and Beresford Street, on the old Esplanade Hotel site.
CCC adopted the New Brighton Centre Master Plan in March 2015 after three years of planning and consultation. Funding has been secured for streetscape and private spaces, and there will be a focus on public-private partnership to implement the plan.
Add to that the new $80 million campus for Shirley Boys and Avonside Girls’ high schools to be built on the former QEII site in time for the 2019 school year, a new eastern sports and recreation centre including a 25m pool on the same site, a $5 million indoor sports centre featuring New Zealand's first 200-metre full circumference running track in Wainoni touted by Celebration Lions League Trust to open in 2017 and a 900m promenade proposed for the Marine Parade sand dunes and you’ve got some good reasons to live – and invest in – the east.
Changing demographics – community spirit
Christchurch’s eastern suburbs are considered by some to be the poor cousin of Greater Christchurch and never more so than after the 2011 earthquake devastated the area. But as new houses go up and streets slowly get repaired, the demographics are changing too.
Electorate area data shows that income in Christchurch East is on par with the rest of New Zealand. The area also has more people working per capita than the national average: 30% of those are managers or professionals and 34.2% trades or labour. There are lots of families, accounting for 65% per cent of household composition, and just 21% of those families have a single parent. The majority of residents are 20 to 50-year-olds, and more than 4000 people from the UK and Ireland live there. Rentals properties account for 31% of total properties in the area.
So, while it’s been a tough road – literally – in Christchurch East over the past five-and-a-half years, it that hasn’t dampened the spirits of those who live there.
“There are great communities, from preschools and primary schools through to high schools,” Caroline Ireland said. “People love living in the east, which is great.”
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