Market Comment - April 2025

Market Update – April 2025

What We’re Seeing in the Christchurch Rental Market

Migration Trends & Market Outlook: Net migration continues to trend low—and even decline—which remains a concern not only for current property owners but also for developers planning future projects. This ongoing pressure suggests we're in for another unpredictable year.

Yes, interest rates are easing, which is welcome news. But the big question remains: will this be enough to offset rising costs for investors? We’re keeping a close eye on insurance premiums, council rates, and ongoing maintenance expenses—these are all key factors impacting investor returns.

Short-Term vs Long-Term Investment Shifts: If we continue to attract more international tourists, we could see a short-term boost to the accommodation sector. While margins are tight, this may help rekindle interest in long-term rental investments—especially if demand shifts and supply tightens. It all comes back to the basics: supply and demand.

Investor Behaviour & First Home Buyer Pressure: Property investors are also feeling the pinch from increasing demand from first-home buyers. However, when investors are buying, many are opting for modern townhouses and units. These properties offer affordability, lower maintenance, and often come with attractive purchase incentives.

Rental Price Trends: Nationally, the median rent has finally moved after 11 months stuck at $600 per week—it jumped to $620 in January. However, this rise hasn’t been consistent across the board. Regions like Northland, the West Coast, Tasman, and Nelson recorded rent drops.

Rental Market Performance – March Overview

Here’s what we’ve observed over the past month:

• Student Rental Demand: This season’s student rush is now over. If you missed that window, it’s now significantly harder to find tenants at student-rate expectations. That "ON" switch is definitely OFF.

• Activity vs Last Year: Within our office, the number of rented properties was down 1% compared to March last year. The market appears stable overall, but it’s definitely harder to rent. On the plus side, our days on market remain well below the industry average, and holding onto good long-term tenants is more important than ever.

• Demand vs Supply: Demand is down. Supply is up. That imbalance is adding to the challenges for landlords.

• Expert Outlook: Most market commentators expect gradual and sustained growth this year—but the speed of recovery remains uncertain. That said, Christchurch continues to offer affordable home ownership, especially compared to other main centres, which could draw more people to the city over time.

• Rental Price Fluctuations: We’re seeing inconsistency, especially in the two-bedroom townhouse segment. Prices have been all over the place—this trend has persisted for months.

• Inner-City Developments: A large number of inner-city apartments and units are expected to hit the market in 2025. Keep an eye on this—there could be implications for pricing and vacancy rates.

• Family Homes Holding Strong: The family home rental market remains solid, with consistent rents in the $600–$700 per week range. That’s a bright spot.

• Signs of a Softer Market: We’re noticing more “For Rent” signs popping up roadside—a telltale sign that some properties are taking longer to lease.

• Incentives from Developers: Larger developers are beginning to offer more incentives to attract buyers and tenants. This trend may grow in the coming months.

• Christchurch: Townhouse Capital? A local agent recently quipped that “Christchurch has become the Townhouse Capital of New Zealand”—and honestly, it’s starting to feel that way.

Key Investment Tips

• Fixed-Term Tenancies: Still your best security. Long-term tenants are gold—just make sure you’re reviewing rents annually to stay aligned with the market.

• Add Value Where You Can: Now’s a great time to improve your property. We’re seeing good deals on trades like carpet and painting as tradies look for more work. Take advantage of that while you can.

High-Performing Suburbs for Rental Demand

These suburbs continue to show strong tenant interest and consistent demand:

• Spreydon

• Somerfield

• Barrington

• Burnside, Bryndwr, and Harewood (Northwest Suburbs)

• Riccarton (as always)

• St Albans

Want Local Insights?

If you're curious about specific suburbs or want to chat about where things are heading, give us a call. We’re always happy to provide insights tailored to your investment needs—whatever stage you're at.