November 2022 Market Update

by Hamish Wilson on Tue Nov 2022
November 2022 Market Update

Introducing our new Team Leader, three bedrooms are in demand as rents stay on simmer...

Welcome to November! The mention of November seems way to soon in the year but the reality is that we are only 54 days away from Christmas and 61 away from the beginning of 2023!

Exciting Addition to Our Team
This month we’ve welcomed Karen Edwards to our team as our new Team Leader. Karen started at Barfoot and Thompson as a PA to her then new partner. After a couple of years, they decided to move into their own business effectively trading houses. Karen did all the accounts for the business as well as the leasing while her partner focused on the sales. Together they sourced, renovated and staged the properties.

As a result of their success in this business they created their own property management business which grew to 150 properties over a number of years. Karen ran all the operations and administration of the business, leased and managed the properties, hired and trained the staff (including on the various software programs) and implemented social media and SEO for the business.

In 2021, a friend offered her a role as a Senior Property Manager for Barfoot and Thompson’s Pukekohe office, where she managed a team of nine and an individual portfolio of 125 properties. Subsequent to that Karen decided to move to Christchurch to be closer to her family.

Karen has been busy familiarising herself with the local market and spending time with the team supporting them in their day-to-day operations. I’m sure you’ll cross paths with Karen and get the opportunity to meet her in the near future.

What’s Happening In The Local Market?
This month I’ll dive a little deeper into what we are seeing at the coal face and feelings coming through the market. It seems there is a little more stock finding it’s way into the rental pool locally. As at today we have 811 properties to rent across the city, which is an increase of 77 from this time last month. Spring time does see some fixed term tenancies come to an end and the churn of them may account to some of the increase in the market.

Even with the additional stock, the market is still tight and is just over 400 properties away from what I’d call “the norm”. This month we have seen a number of the new two-bedroom apartments come onto the book. The team have done a fab job and tenanted all but one that we’ve had this month. This type of property still makes up 34% of the current stock available across the city. There are a few key factors to ensuring that these tenant well without any extended vacancy periods. There remains a number to come to the market yet and going forward there will be some healthy competition for tenants within that market.

Supply and demand data from Trademe shows some interesting trends this month. We are starting to see the supply of two-bedroom, one-bathroom properties pushing ahead of demand for the first time in quite a while. One-bedroom properties are under supplied by 5% but the real demand is being seen in the three-bedroom, two-bathroom space.

We are experiencing that need for three-bedroom properties in the office also. We have let a number of properties this month in that category and have found that the demand has been in excess of what we have experienced before. Some have seen over 30 registrations for viewings at any one time. As I said last month, tenants in Christchurch still have cars and Kiwi’s love their “stuff” - be it a bike, BBQ, surfboard or whatever we all come with, and that’s translating into the demand in the three-bedroom space.

We’ve seen rents to be very strong in response to that demand. A great example is one new owner is taking home over $130 more per week - fees paid, than when they were managing it themselves. This is a direct result of our knowledge and management - I love it when that happens.

Rents Are On Simmer
The pressure throughout the entire market is keeping rents on the simmer here in Christchurch. Average rents from February this year were up $40 per week to $520 per week in August before giving up $20 per week to $500 per week in September. Supply and demand wise across the city, the $500- $700 per week bracket is where over 40% of the demand sits and supply is tracking along nicely here also. Interestingly enough in the $700-$1100 per week bracket, the demand is in excess of supply. This is further confirmed when a property of that calibre comes to the market as they are incredibly popular.

It seems the market is extremely sensitive to “market rent” and anything that is perceived as being at the top is promptly being looked passed. It is always a fine line we walk with achieving the best possible rent and minimalizing potential vacancy periods.

Water Water Everywhere
Don’t forget the Christchurch City Council (CCC) are implementing excess water supply rates. The targeted rate will apply to any single household with a water meter that uses, on average, more than 700 litres a day – roughly equivalent to 100 toilet flushes. Property owners in Christchurch will pay a fixed rate of $1.35 for every 1000 litres they use over the average limit. We are now reading water meters at our In-going and Out-going inspections to assist with the apportionment of these charges, if any. We know that this billing is retrospective, which is a pain to say the least, but we will work through it as we go. It’s new to everyone, us included.

As always, we do truly appreciate your business and the team and I are always just a phone call away. We are always available for a free chat and are happy to share our experience and knowledge wherever we can be helpful.

Hamish Wilson

Hamish Wilson

An active investor for over 25 years & qualified builder, property has always been a part of life. Hamish has sat on the committee of the Canterbury Property Investors Association including two years as President.