Christchurch house prices | How is the Christchurch property market going?

Christchurch is one of our top picks in the country for investment properties.

Why? It’s undervalued, it’s affordable – and it’s also a hot spot for development to accommodate its burgeoning population.

This means properties are comparatively cheap, although prices have been catching up.

But Christchurch is smaller than the likes of Auckland and Wellington. So, you might be thinking: “Is Christchurch a good investment?”

In this article, you’ll learn all about Christchurch house prices, how quickly they will grow, where the most affordable areas are and what sort of properties are on offer – all to keep you informed about what’s going on in the market.

Do you have a question or comment about the Christchurch property market? Feel free to leave your thoughts in the comment section at the end of the page.

Where is Christchurch City and what’s it like?

Let’s take a moment to make the distinction between Christchurch the city, ‘Christchurch City’ district, and the Greater Christchurch area, because it’s confusing.

So, Christchurch the city – is the one you’re familiar with. It’s the largest city in the South Island.

Then there is Christchurch City district, which is one of 10 council areas within Canterbury. This district goes all the way out to Banks Peninsula and includes places like Lyttelton and Akaroa.

Christchurch is within the Christchurch City district.

In terms of population, Christchurch is second only to Auckland.

Some people also get confused about what’s informally known as “greater Christchurch”, which includes developing towns like Rolleston (in Selwyn District), Kaiapoi and Rangiora (Waimakariri District).

For the purposes of this article, we’re just talking about the actual city of Christchurch.

Between 2010 and 2012, Christchurch suffered a series of earthquakes. During these natural disasters, thousands of homes and buildings were damaged. This lead to ongoing recovery and rebuilding projects.

More from Opes Partners:

• How is the Canterbury property market going? (Article)
• Are Christchurch properties harder to insure after the earthquakes? (Podcast)
• What's currently happening in the New Zealand property market? (Article)

So… Is Christchurch City a good place to invest?

From our analysis, Christchurch City stacks up as an area worth considering.

Although – like every area – it won’t be the right fit for everyone (more on this below).

#1 Christchurch City is undervalued

According to our analysis, districts in Canterbury (as a whole) and the top of the South Island are the most undervalued areas in the country.

This suggests there is more potential for capital growth over the next few years in these southern districts like Christchurch City rather than in the lower North Island.

#2 Christchurch City house prices aren’t falling by as much as other cities

House prices around New Zealand were falling. However, Christchurch City’s house prices were more resilient compared with the rest of the country.

Where is the best suburb to invest in Christchurch City?

Which Christchurch suburbs grow in value the fastest? This map lets you find out for yourself.

Each block represents a different suburb, and the colour of the block represents how quickly house prices have increased over the past 20+ years.

The redder the block ... the quicker house prices have grown in that suburb.

So, which suburbs in the Christchurch property market have the highest gross rental yields?

Navigate the map below to find the suburbs where houses produce the most cash for their investors. The redder the block … the higher the yield.

What sort of properties should I buy in Christchurch City?

The choices for investment properties in Christchurch City are typically: 2-bed and 3-bed townhouses, apartments, and some standalone houses.

These types of properties present an affordable option for long-term passive property investors, who tend to focus on New Builds.

Two-bedroom townhouses are extremely popular and commonly found in Christchurch’s inner city, in places like Addington and Linwood.

If you prefer to invest in a standalone house, you’ll likely invest in Halswell (on the outskirts of the city) or in one of the satellite towns around Christchurch.

That’s because purchasing a New Build standalone house close to the centre of Christchurch would be prohibitively expensive, and likely to provide low rental returns.

How much will it cost to invest in Christchurch City?

Properties in Christchurch start at around the $539,000 mark for an entry-level townhouse.

Two-bedroom townhouses are typically priced between $539,000 and $600,000 (maybe $660k), depending on how nice they are, the location, and whether they have a garage.

These typically rent for $480-$550 a week.

Recently, Opes has stopped recommending properties in Christchurch that are over $750k.

This is because, once they start going above this price, you could invest in a property in Auckland, which in our modelling is expected to grow in value more quickly.

Our thinking is: If you’ve got the ability to spend $750,000 on a property you may be better off buying a standalone property in Rolleston, or a townhouse in Auckland.

Here are 3 real examples of properties that Opes is currently recommending in Christchurch (at the time of writing).

#1 – 32 Ryan Street, Phillipstown – $569,000

This development of 7, 2-bedroom (with a study), townhouses, start at $569k and finish at $579k.

They are expected to rent for $480-$490.

These entry-level townhouses are expected to achieve a gross yield of 4.43% (taking the midpoint rent of $485).

#2 – 167 Innes Road, St Albans – $649,000

This development of 6, 2-bed townhouses are priced between $649k and $699k.

Properties are expected to rent for $535-$580.

The property is expected to achieve a gross yield of 4.28%, if using a conservative $535 rent.

Here at Opes, we would consider this a “middle of the road” property (e.g. neither entry level, nor in the top price bracket).

The price range is largely swayed by whether the unit has a car park or a garage.

#3 – 408a Barrington Street, Spreydon – $715,000

The development primarily consists of 3 bedroom townhouses, which are priced from $715k. The units come with a built-in garage, which is one of the reasons this is considered a higher-end investment.

Properties are expected to rent for $620.

The property is expected to achieve a gross yield of 4.51%, and come with 2 bathrooms and a garage.

Should I buy an investment property in Christchurch?

Christchurch is a good option for entry-level investors who want to get on the ladder, but who have limited lending potential or a lower deposit.

This is because properties in Christchurch tend to be a bit cheaper than say those in Auckland.

But an affordable 2-bedroom townhouse may not be suitable for an investor looking to diversify a portfolio (e.g. if the investor already owns lots of townhouses). That’s where a more expensive standalone could be the right fit.

On the flip side, if you are an investor with a large deposit or lending capacity, then putting all your money in Christchurch properties may not be the best decision.

For instance, if you have that sort of money, you may like to park some of it in Christchurch and then take some of it up north to the bigger cities where capital growth is stronger (in Auckland), or rents are higher (in Wellington).

In Graphs – is Christchurch a good place to buy an investment property?

This section is for the data nerds. Here are the key points you need to know to better understand the Christchurch property market and the Christchurch economy.

#2 Capital growth

House prices in Christchurch City have increased very quickly over the last 30+ years.

#4 Rents

Here's how Christchurch rents have increased since 2000 and how that compares with the rest of the country.

#5 GDP growth

It's hard to get GDP data for individual council areas. So, we can't easily say how fast Christchurch City's economy is growing. But, we can get data for wider Canterbury. 

Write your questions or thoughts in the comments section below.