In which areas does Opes recommend investment properties?

Here at Opes Partners, we find New Build properties for investors.

Those properties come from all over the country. This includes Auckland, Christchurch, wider Canterbury, Wellington, Hamilton and Dunedin.

Picking the right city to invest in is just as important (if not more) than picking the right property.

So many investors wonder: “Where do you recommend properties?”

So, in this article, you'll learn our top spots for investment and why we recommend these areas.

Which areas does Opes recommend?

Right now, we tend to recommend properties in:

- Auckland

- Christchurch

- wider Canterbury (Selwyn and Waimakariri district)

But you should only invest in a property that suits the area. For example, we recommend:

- Townhouses in Auckland and Christchurch

- Standalone houses in Christchurch, Rolleston and Kaiapoi (wider Canterbury)

- Dual-Key apartments in Auckland and Wellington

A 2-bedroom townhouse won’t be popular with tenants in a place like Rolleston. There, everyone lives in standalone houses.

Whereas a standalone house won’t be the right fit in Central Auckland; a house would be too expensive to be a good investment property.

Now, let’s go into each location in more detail. This includes:

- Target property prices

- Pros and cons

- Examples of each property

Auckland

Price range: $699,000 - $1.1 million

There are pros and cons of investing in any city, so let’s go through the pros and cons for Auckland.

Pro #1 Auckland’s population is growing fast

Auckland’s population is forecast to grow 24.9% over the next 25 years. That’s 421,600 people (more people than currently live in Christchurch City).

So imagine if everybody in Christchurch packed their bags and moved to Auckland ... that’s effectively what will happen over the next 25 years.

All these people will need a place to live, increasing demand for housing.

This will put pressure on house prices and rents. 

Pro #2 Auckland property prices are undervalued

Property prices in Auckland are 9.3% lower than we'd expect them to be.

So Auckland house prices could increase faster than other parts of NZ over the next few years.

How is this data calculated? Read about whether Auckland house prices are undervalued here.

Pro #3 Auckland property prices increase faster than the rest of New Zealand

Auckland property prices have consistently increased faster than the rest of the country.

They are 8.3x what they were in 1992. That compares to 6.6x for the rest of the country.

What are the cons of investing in Auckland?

While investing in Auckland has benefits, it also comes with cons.

First, Auckland house prices are high. On average, Auckland properties are about 1.4x the price of the average NZ home.

Because of this, they also tend to have lower yields. The property prices are high, but rents aren’t substantially higher than the rest of NZ

Because of the lower yields, investors typically buy townhouses rather than standalone houses. Some investors don’t like this.

Which parts of Auckland do we recommend investing in?

South and West Auckland are our 2 top investing “hot spots” in the country’s largest city.

These include suburbs like:

- Mangere, Manurewa (South Auckland)

- Massey, Te Atatu Peninsula, Glen Eden (West Auckland)

We sometimes recommend areas of the North Shore like Birkdale and Beach Haven.

Reasons for recommending these are:

1) Properties in South and West Auckland are more affordable

2) Because of this, these areas have higher rental yields

3) Despite the decent yields, house prices in these areas have risen quickly; they’ve had good capital growth in the past.

Extra reading:

- Video – Best places to invest in Auckland

- Should I invest in a dodgy suburb?

- South Auckland – An honest review

Christchurch

Price range: $540,000 - $950,000

Christchurch is another top pick as a location to invest. Here are the pros and cons of Christchurch.

Pro #1 Christchurch property prices are undervalued

Christchurch is currently undervalued. Prices there are 10.8% lower than we’d expect them to be.

So Christchurch prices could increase faster than other parts of NZ over the next few years.

How is this data calculated? Read about whether Christchurch house prices are undervalued here.

Pro #2 Christchurch properties are affordable

Christchurch is home to some of the most affordable properties in the country.

The average house value in Christchurch is $732k.

That compares to $921k for the rest of New Zealand (CoreLogic, May 2023). So, on average, Christchurch property prices are 20%+ cheaper than NZ as a whole.

In some cases you can buy a New Build investment property in Christchurch for $540,000.

Pro #3 Good rental yields

Because Christchurch property prices are more affordable, they tend to have higher yields.

What are the cons of investing in Christchurch?

While properties in Christchurch are cheaper, they also come with cons.

Property prices aren’t likely to increase as quickly compared to Auckland.

It costs more ($500 - $1,000) to insure a house in Christchurch than in Auckland or Hamilton, although insurance costs will still be lower than in parts of Wellington.

Some investors worry there are too many New Builds under construction in Christchurch. They fear an oversupply, and although we would dispute that fact, it’s still a real worry for some investors.

Where in Christchurch City do we recommend?

Opes recommends properties in suburbs like Addington, Sydenham, Spreydon and Aranui.

We also recommend properties in Halswell, Belfast and across the whole city. It depends on the deal.

The suburbs we focus on have a mix of:

• high capital growth (house price increases)
• high yield (rental return)

Inner-city areas like Addington, Sydenham and Spreydon are better for townhouses,

whereas areas like Halswell and Belfast suit standalone houses.

Extra reading:

- Video – Best places to invest in Christchurch

- Christchurch property market

- Are there too many townhouses?

Wider Canterbury

Price range: $750,000 - $850,000

Canterbury satellite towns like Rolleston and Kaiapoi are also investment hot spots. These towns are in the Selwyn and Waimakariri districts, respectively.

Here are the pros and cons.

Pro #1 Selwyn and Waimakariri prices are undervalued

Both Selwyn and the Waimakariri districts are undervalued.

Prices there are 5.2% and 8.6% lower than we’d expect them to be, respectively.

Pro #2 Population is growing fast

Stats NZ expects Selwyn district’s population to grow faster than any other part of NZ.

Forecasts suggest the population there could grow by 47%. Waimakariri’s population is also expected to increase by 25%.

Pro #3 More likely to buy a standalone house

Some investors prefer to invest in standalone houses. Houses in Rolleston and Kaiapoi are more affordable, and the rents are healthy.

So investing in a standalone house in these areas is more doable than buying one in other parts of NZ.

What are the cons of investing in wider Canterbury?

Property prices aren’t likely to increase as quickly in wider Canterbury compared to Auckland.

+28,000 people live in Rolleston, and 10,000 live in Kaiapoi, so there are fewer people, which means a smaller pool of potential tenants.

On top of this, these towns are a 20-minute drive from Christchurch City. Some investors prefer to invest closer to the city centre.

Where in wider Canterbury do we recommend?

Opes typically recommends properties in Rolleston and Kaiapoi for the reasons mentioned above.

Extra reading:

- Rolleston – An honest review

Other areas – Wellington City, Lower Hutt, Hamilton and Dunedin

From time to time we will also recommend properties in:

• Wellington City
• Lower Hutt
• Hamilton and
• Dunedin

But, while these areas can be good for investment, they aren’t as strong as our top three.

We’ll only recommend properties in these ‘other’ areas if it’s a strong deal.

What about other cities?

You might wonder, “What about Palmerston North?” or “What about Gore or Invercargill?”

Being the data nerds we are, Opes Partners analyses every city in New Zealand. You can find all of this for free in our Data Hub.

If we haven’t mentioned an area on this list, we genuinely don’t believe it’s the best area right now.

We’ll change our investment recommendations and update this article as the data changes. Stay tuned.