Catch the Turning Tide of Property Investment
The tide is turning for the Christchurch investment property market. Mortgage Adviser Nathan Miglani explains.
After a couple of quiet years, with investors sidelined by LVR restrictions, activity has picked up significantly in 2019. From numbers representing about five per cent of the mortgage applications processed in my office last year, investors now make up 30 per cent! That’s huge growth – so what’s changed for investors and how can you join them?
I’ve been talking about great conditions for property investment in Christchurch for a good couple of years. A general cooling of property prices has meant investors have great-value property to choose from – whether your taste is for a solid brick-and-tile bungalow on a full section just five or 10 minutes from the CBD or a brandnew apartment in the inner city. Add to that record-low interest rates making mortgage finance easier to service (and presenting the opportunity of making a real dent in your borrowing) and a loosening of the LVR (together with some competitive non-bank options now available).
From my perspective, it seemed that Auckland-based investors were the first to take notice of the favourable conditions in Christchurch. Last year we started seeing Aucklanders drawn by the affordability of Christchurch property – the prices being asked here for property in the CBD or city fringe must seem incredibly good value compared to Auckland. This year, local investors are responding to the opportunities presented by perfect market conditions.
What’s particularly exciting is the fact that so many people are entering the investment market for the first time. These aren’t your stereotypical investors, but regular people who have worked hard to buy a family home and pay down the mortgage, and now have enough equity to be able to finance a second property. It’s great to see these people seizing the opportunities on offer to start building a nest egg for a more financially secure future.
If this all sounds appealing and you’re thinking about entering the market, it’s important to talk to a professional mortgage adviser first. Every bank has different policies and products – perhaps even more so when it comes to investors – so even if one bank says no, another might say yes. There are also non-bank options that you don’t get access to if you go straight to your regular bank.
As a registered Financial Adviser, I can also provide advice and help you structure your borrowing to open doors that you might not have thought possible. New builds, for instance, are exempt from LVR restrictions, so building a brand-new rental with just 10 per cent deposit is a popular option. Split banking (borrowing from more than one financial institution) can also put new opportunities within reach. We also work with a non-bank lender new to the New Zealand market that allows you to purchase an investment property with just 20 per cent deposit (even for existing properties).
My team and I have access to all the banks (and a range of nonbank lenders), so we can get you the very best deal to meet your property investment goals.