My non-expert opinion on some of the opportunities in the current downturn for investors to consider.
Development Land in Restricted Areas
Watercare’s new restrictions map has identified areas in Auckland where development will be difficult due to water and wastewater constraints for the next 10 years.
As a result, some landowners who had planned to develop in these areas are selling their land at reduced prices.
Opportunity: If you have a long-term investment horizon (10+ years), buying land in these areas now could lead to strong future returns.
Apartments in Central Auckland
Challenges in the city: Apartment prices have taken a hit due to several factors:
Fewer international students during COVID.
Roadworks and disruptions, particularly from the city rail link project.
However, as the rail network improves and the city infrastructure completes, apartments in Auckland Central could see a lift in demand and value.
Opportunity: Prices may be near rock-bottom, making this a strategic time for apartment investments.
Houses Selling Below Replacement Cost
In some areas across New Zealand, houses are selling for less than it would cost to rebuild them due to inflation and rising construction costs.
Hamish shares a personal experience where an insurance claim revealed that the replacement cost of a home was more than its market value even with land included.
Opportunity: Buying in these areas could be a smart move, as construction costs are unlikely to drop significantly in the future, some of these houses are available at below cost.
Final Thoughts
The market may be near the bottom, but timing the absolute low is impossible.
Investors should focus on fundamental rules:
Buy in towns with 50,000+ population for better long-term stability.
Stick to three-bedroom homes where possible.
Budget for higher maintenance costs on older homes.
Recommendation: Keep an eye on the market, explore your numbers. We have some new tools for doing so.
