Springtime optimism: Christchurch’s property market flourishes

Springtime in Christchurch always brings a renewed energy, showcasing the natural beauty of our parks, rivers and gardens which are a fantastic asset to our city. As the daylight hours extend, there is a discernible upbeat atmosphere around the city as we take the chance to pause for breath before the pre-Christmas rush.

There is a clear contrast emerging between Christchurch and other New Zealand cities which are grappling with infrastructural challenges. Our city is buzzing with optimism; fuelled by our rebuilt city centre, upcoming spring and summer events, tourism growth and the progression of One NZ Stadium. With population growth, relative house price stability and demand for CBD property providing further local economic drivers, Christchurch is firmly on track towards an exciting future.

The upcoming cruise ship season and airport passenger movements provide further reason for optimism in our local economy. Christchurch Airport passenger numbers are approaching pre-pandemic levels and the first cruise ship of the 2024/2025 season is due at Lyttelton in mid-October. There is now a recognised shortage of hotel rooms in the city, which will be alleviated somewhat with a handful of hotel developments and proposals in play at the moment. This will give domestic and international travellers a much-needed greater choice of options in the central city.

Despite the many reasons for optimism, pressure remains in the local economy and there are significant challenges still to filter through the system at a business level, with investment and expansion plans being put on hold. Positive messaging from the Reserve Bank gives reasons for hope, while the easing interest rate environment should also give more confidence to kickstart business investment over the next 12 to 24 months and help the sector face the challenges ahead.

In the commercial property market, we are seeing more owners progress with divestment plans that were put on hold amid the pricing uncertainty of the past couple of years. Investment enquiry levels are also increasing, as the long-awaited end of interest rate increases triggers greater numbers of investors keen and ready to buy. Debt markets are becoming more supportive of those making property investment decisions, which is adding weight to the significant investment capital that has been searching for opportunities throughout the downturn. 

While it remains to be seen whether these trends will lead to a real uptick in sales volumes, any positivity is to be welcomed in the current environment. There is reason for hope that buyer confidence may prompt sellers to become more market-aligned in their pricing expectations. It is also heartening to see pockets of strong market performance across the city, including prime CBD retail and office property. Significant capital has already begun flowing into the local property market this year, with notable deals such as the sale of the LPC/MOVe Logistics facility at 32 Iport Drive in Rolleston to Booster KiwiSaver Scheme, demonstrating the attractiveness of quality local assets to national investors. 

All these factors contribute to the positive feeling of renaissance in our city this spring, which is clearly evident as we look forward to major events including Cup & Show Week, food & wine festivals and music events, including Electric Avenue, which has grown into a nationally-recognised two-day festival. Christchurch property is displaying excellent value compared with most other major centres in New Zealand, while the South Island as a whole is set to benefit from the ongoing tourism recovery and population growth. We look forward to welcoming this increased positivity into the commercial property market as we approach the end of 2024.