Will investors still buy Chch property?

Tuesday, September 21st 2010, 3:50PM

We Kiwis have a bit of a fascination with house price stats, which probably is no surprise considering our so called love affair with bricks and mortar.

I suspect this penchant to look at house price stats will become even more interesting following the awful events in Christchurch earlier this month.

It’s our second biggest city and accounts for its fair share of house sales each month. However following the quake the market has stopped dead in its tracks.

Part of the reason is to do with insurance, or the lack of appetite for insurers to issue cover at the moment.

In coming months this is likely to distort the numbers produced by organisations like QV and REINZ.

But the quake also raises lots of other questions which will no doubt test the minds of property investors. One is that we often talk about the best house to buy as investments are low maintenance brick and tile properties.

Following the quake it seems most of the damage has been to these types of property rather than the wooden, weatherboard, tin roof type houses.

Also you have to wonder what will happen to house prices in the Garden City once sales start again. Will people, including investors, still want to buy property there? Or will they opt for other areas?

Maybe, if they are buying in Christchurch the criteria for may change and premiums will be paid for good quality buildings which have withstood the destruction unharmed?

Another thought which has crossed my mind is that maybe there is a potential “leaky home” type crisis brewing. Engineers certify a building is sound following the quake but years later some damage is found which is expensive to repair and impacts on the value of the property.

We’ve been keeping an eye on what is happen on Landlords.co.nz and the next issue of NZ Property Investor will have a feature on what the quake means for property investors. We’d love to hear your thoughts on what the big shake has meant for the property market and particularly investors. Leave a comment here or email your thoughts to editor@landlords.co.nz

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