KARAMU, RICCARTON PARK, Russley, EARLY STAGE, Discounted OFF THE PLAN TOWNHOUSES

  • Well designed, high quality, low maintenance townhouses in unique trackside location and quality suburb

  • 20 year capital growth average for suburb is 9.1%

  • 8 x 2 bed and 8 x 3 bed townhouses

  • Opportunity for additional capital growth before settlement in May 2020

  • Prices: 2 bed $518k - $528k, 3 beds $533k - $550k

  • The prices for these turnkey townhouse and land packages have been discounted $17,000 - $32,000 by the developer due to pressing pre-sales deadlines they need to hit.

  • The Christchurch market is undervalued based on the historical growth performance and growing gap between Christchurch and national average. In the last 10 years the market grew 40% in value compared to 80% in the prior 10 years. The earthquakes in 2010 and 2011 and city rebuild have interrupted the growth cycle.


INVESTMENT Overview

Strategy: Discounted off the plan
Upside: Growth prior to settlement
Rent: Unfurnished
Lending: 80% LVR
Deposit: 10%
Deposit type: Cash, equity
Title: Unit

Suburb Performance

Dwelling type: Townhouse
Market rents 2 bed: $413 p.w.
Market rents 2 bed: $450 p.w.
Median gross yield: 5.15%
Median sale price 10 years: +39%
Median sale price 20 years: +182%
Capital growth (20 years): 5.6% p.a.

The property

Type: Townhouse
Beds/Baths: 2+1, 3+2
Garage: 1
Valuation: $17-$32k Discounts
Internal floor area: 2 bed 122-128 sqm, 3 bed 149 sqm
Land area: 211 - 409 sqm


Russley Townhouse Market Performance

Townhouse median sale price July 19: $480,000

 

Townhouse days to sell: 35

Townhouse sales volume: 40-50 per year

 

Townhouse sales value: $23 million per year

Market data sources: Real Estate Investar, Tenancy Services, REINZ, One Roof


First home buyers

Dwelling: 2 bedroom townhouse
Purchase price: $518,000
Deposit: 10%
Weekly cost to own: $555
Occupancy: Sole

First home Investors

Dwelling: 2 to 3 bedroom townhouse
Purchase price: $518,000 - $533,000
Deposit: 10%
Weekly cost to own: $235 to $380
Occupancy: With flatmate/s

Property Investors

Assessed rent 2 bed: $430 - $450 p.w
Assessed rent 3 bed: $520 - $550 p.w
Year 1 cashflows: 2 bed (-$5 p.w.)
Year 1 cashflows: 3 bed (+$62 p.w.)
DSR: 1.4
Gross yield: 4.1% - 4.6%


PRICE AND AVAILABILITY SUMMARY

To reserve a property, request a contract, provide the details requested in the form and we will issue a conditional contract to you for signing. You have up to 48 hours from receipt of the contract to sign, or the property may be released to another buyer. This is not a binding commitment until the contract documents are issued and signed by both parties. Your contract will include a conditional period to enable you to complete due diligence and confirm finance. Until your contract goes unconditional, you are not obligated to purchase the property.


Analysis Assumptions

  • Loan length: 30 years

  • Interest rate: 3.75%

  • LVR: 100% Investors / 90% Home Buyers

  • Rates: $

  • CPI: 3.0%

  • Capital Growth: 5.6%

  • Valuation: Matches listing prices

  • Legal/Loan fees: $2,000

  • Rent: Market rents appraised by property manager

  • Body Corporate: N/A

  • Property Manager: NIL

  • First Home Buyers/Investors current rent: $400 p.w.


 
 
 
 
 
 

 
 


Project overview

Karamu is a unique and first of its kind investment opportunity in Christchurch. Developed on the edge of the oldest racecourse in New Zealand on reserve land, it has a stunning a backdrop for tenants and owner occupiers alike. Built by a highly successful and respected building company thats operated in Christchurch for more than 50 years, this boutique project is in stage 1 of a 5 stage development.

Karamu at Riccarton Park is a $300 million, 600-home development at a Christchurch racecourse. The land, situated around the outside of the Riccarton Race track, has been developed by the Christchurch Racecourse Reserve Trustees and Ngai Tahu Property. This development, alongside those at Awatea, and Colombo and Welles streets, is the final phase of the Government's housing response to the Canterbury earthquakes.

It is a 33 hectare development of land predominantly on the western fringes of the Riccarton Racecourse site as a new residential subdivision. Riccarton Racecourse is the oldest racecourse in New Zealand and is significantly bigger than either the Ellerslie Racecourse in Auckland or the Trentham racecourse in Wellington. It hosts 22 race meetings a year, including the New Zealand Cup during Cup and Show Week.

56% of the Russley dwellings are occupied by 1 to 2 people. There is very little in the way of 2 bedroom stock on the market for sale or rent in Russley and this unique racetrack location, surrounded by schools, cafes, restaurants and bus routes is likely to see excellent rental demand for these new properties from tenants according to local property managers.

When it comes to resale these 2 and 3 bedroom townhouses on 211-331 sqm sections, will appeal to first home buyers, young families and professional couples. With 43% of households in Russley earning more than $70,000 p.a. (26% above $100,000) this is a quality demographic with 39% of residents in professional or management roles.

Investing in stage 1 of a multi-stage (5) development often sees higher prices set in later stages of release by the developers as the location gets established, extra amenities appear and other tenants/buyers confidently follow the early stage purchasers, albeit at higher prices. These types of buyers usually purchase when they can ‘see’ a property vs making that decision ‘off the plan’. We managed to secure 16 lots in this green fields subdivision and we understand that the next release of sections and house & land packages will be at a much higher price.


Christchurch overview

Christchurch is the largest city in the South Island of New Zealand and the heart of the Canterbury Region. The Christchurch urban area lies on the South Island's east coast, just north of Banks Peninsula. It is home to 404,500 residents, making it New Zealand's third-most populous city behind Auckland and Wellington.

The city suffered a series of earthquakes between September 2010 and January 2012, with the most destructive of them occurring at 12.51 p.m. on Tuesday, 22 February 2011, in which 185 people were killed and thousands of buildings across the city collapsed or suffered severe damage. By late 2013, 1,500 buildings in the city had been demolished, leading to an ongoing recovery and rebuilding project.

The city experienced rapid growth following the earthquakes. A Christchurch Central Recovery Plan guides rebuilding in the central city. There has been massive growth in the residential sector, with around 50,000 new houses expected to be constructed in the Greater Christchurch area by 2028 as outlined in the Land Use Recovery Plan (LURP). The rebuild of Christchurch and population growth has created significant investment opportunities for investors. Read more