5 Key Questions to Ask Before Buying Property
Before you buy property, ask yourself these 5 key questions to avoid costly mistakes and ensure a smart investment:
-
What’s the property’s true value?
Use rateable values, online tools (like CoreLogic or OneRoof), and professional valuations to get an accurate picture. -
Where is the market heading?
Check past trends, growth rates, and future development plans in the area. -
What are the ongoing costs?
Factor in mortgage payments, council rates, insurance, and maintenance expenses. -
What risks does the property have?
Evaluate natural hazards (like flooding or earthquakes), building condition, and zoning rules. -
Does it fit your future plans?
Consider location, transport links, local amenities, and long-term suitability for your lifestyle or investment goals.
Quick Overview of Costs and Risks
| Expense Type | Annual Cost (NZD) | Key Risks |
|---|---|---|
| Mortgage Payments | Varies based on loan amount and interest rate | Market fluctuations, interest rate increases |
| Council Rates | Approx. $2,998 | Zoning changes, increases in council levies |
| Insurance | Approx. $2,817 | Earthquake and flood risks, premium increases |
| Maintenance | $2,000+ | Unexpected repairs, structural or weather-related damage |
Note: These figures are based on averages for Christchurch properties and can vary depending on location, property type, and market conditions.
1. How to Check Property Value
Figuring out a property's market value involves looking at various data points and methods. Knowing the different types of valuations can help you make better decisions when buying or selling.
Rateable Value vs Market Price
The Rateable Value (RV) is mainly used by local councils to calculate property rates. In contrast, the market price reflects what buyers are willing to pay based on current conditions [2]. RV doesn’t take into account factors like the property's condition, presentation, buyer demand, or recent upgrades.
Property Value Tools
Several online platforms can help you estimate property values in Christchurch:
| Platform | Features | Best Used For |
|---|---|---|
| CoreLogic | Detailed analytics and valuation tools | In-depth property research |
| QV (Quotable Value) | Official valuation data | Council-recognised property details |
| OneRoof.co.nz | Free estimates and market insights | Quick checks on property value |
| Propertyvalue.co.nz | Instant valuations and sales data | Comparing similar property sales |
Professional Property Assessment
For the most precise valuation, consider seeking a professional assessment. There are three main types:
- Registered Valuation: A detailed, unbiased evaluation by a certified professional.
- Market Appraisal: A real estate agent's estimate based on current market trends.
- Independent Assessment: A thorough review combining objective data with subjective factors.
Using these assessments alongside recent sales data will give you a clearer picture of a property's worth.
Recent Sales Data
Looking at recent sales of similar properties can offer valuable insights into market trends. Focus on homes in the same neighbourhood with comparable size, features, condition, and age. Ideally, examine sales from the last three to six months. Keep in mind, council revaluations are meant for rating purposes and do not reflect actual market values.
2. Market Direction and Growth
The property market in Christchurch has seen some notable trends and shifts, which provide valuable insights into its current dynamics and future potential.
Past Price Changes
By February 2025, the average property value in Christchurch reached $769,984 [3]. Over the past 20 years (February 2005 to February 2025), the market experienced an average annual growth rate of 4.88% [3].
Suburban performance has been mixed. For instance, Spreydon saw a 6.77% increase in property values, while Kennedys Bush experienced a 1.02% decline between February 2023 and February 2025 [3]. When it comes to property prices, Scarborough leads with an average of $1,818,750, compared to Phillipstown's more affordable $458,550 [3].
Market Balance
The market's historical growth has contributed to its current stability. In the quarter ending February 2025, property prices rose by 1.16% [3]. Meanwhile, rental prices have also climbed, with the average weekly rent reaching $550 in November 2024. Over four years, rents increased by $140 per week, reflecting an annual rental growth rate of 7.62% [3].
Future Area Changes
Key factors to consider when evaluating Christchurch's future growth potential include:
- Historical Context: Christchurch was previously undervalued by 22.80% [3], which suggests there is room for further growth.
- Price Segmentation: Property values vary significantly across the city, with high-end areas like Scarborough averaging $1.8 million, while more affordable suburbs such as Phillipstown stand at $458,550.
- Growth Indicators: Recent stabilisation in prices points to selective growth opportunities, particularly in developing suburbs. Additionally, the Opes Area Score for Christchurch is currently rated Green [4], signalling favourable conditions for strategic property investments.
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3. Regular Property Expenses
Monthly Loan Payments
Your mortgage repayment is determined by factors like the loan amount, interest rate, and loan term. To get an idea of your monthly payments, try using an online calculator such as ANZ’s [5]. Keep in mind these are rough estimates, so it’s best to consult a mortgage advisor for more accurate figures [6]. Don’t forget to include fixed yearly costs like council rates and insurance in your budget.
Council Rates and Insurance
Owning property in Christchurch comes with unavoidable yearly expenses. Here’s a breakdown of some typical costs:
| Expense Type | Annual Cost | Weekly Equivalent |
|---|---|---|
| Council Rates | $2,572 | $50 |
| Insurance Premium | $1,000 | $20 |
| Power Bill | $2,343 | $45 |
"Buyers will also be assessed. Criminal convictions, claims history and whether the buyer has had any insurance declined are all factors that insurers consider before providing cover" [7].
Upkeep Costs
Experts suggest setting aside 0.3%–0.5% of your property’s value each year for maintenance [8].
Here are some typical maintenance costs:
| Maintenance Task | Approximate Cost |
|---|---|
| House washing | $400 |
| Roof cleaning and gutters | $300–$400 |
| Annual exterior upkeep | $800 |
| Emergency fund | $2,000 |
"The annual job that people need to know about is washing your house, which prolongs the life of it" [7].
Complex Management Fees
If you own an apartment or townhouse, you’ll need to account for body corporate or management fees. These cover expenses like building insurance, upkeep of shared spaces, security systems, reserve fund contributions, and property management services. A good rule of thumb is to allocate 50% of your potential rental income to cover these fees, along with repairs, council rates, and insurance [8].
4. Property Risk Factors
When buying property, it's not just about costs and market trends. Understanding potential risks is just as important to make an informed decision.
Natural Hazards
Canterbury's natural landscape comes with its own set of risks. Flooding is the most frequent hazard in the region [10], so evaluating a property's exposure to such threats is key before making a purchase.
| Natural Hazard | Key Considerations | Recommended Actions |
|---|---|---|
| Flooding | Most frequent hazard in Canterbury | Check council flood maps and review past data |
| Sea Level Rise | Expected rise of 50 cm–1 m by 2100 | Confirm property elevation, especially if under 1.5 m above high tide |
| Earthquakes | Potential for structural damage and liquefaction | Arrange for a professional assessment |
| Coastal Erosion | Impacts properties near the shoreline | Check insurance options and associated costs |
In New Zealand, nearly 44,000 homes sit less than 1.5 metres above the current average high tide level [9].
Building Condition
A professional building inspection is essential to uncover structural issues. These inspections typically cost between $550 and $1,050 (including VAT), depending on the size and age of the property [11]. Key areas to focus on include:
- Foundation stability and any signs of settlement
- Condition of the roof and drainage systems
- Electrical wiring and installations
- Plumbing systems
- Presence of borer in wooden structures
A thorough inspection usually takes 3–4 hours and includes a detailed report.
Land Use Rules
The Christchurch District Plan outlines what activities and developments are allowed for different property zones. Each zone - residential, commercial, rural, or industrial - has its own rules that can influence property value and usage [12]. Important factors to consider include:
- Current zoning restrictions
- Possible future zoning changes
- Protected elements like heritage buildings or significant trees
- Development restrictions, including height limits
These regulations can directly impact how you use the property and its resale potential.
Rental Market Status
If you're looking at property as an investment, it's crucial to evaluate the local rental market. Tenant demand in Canterbury varies based on location and property type, influenced by factors such as job opportunities, transport links, school zones, and property features. For coastal or clifftop properties, extra care is needed - check if the property is insurable and factor in higher maintenance costs due to salt exposure [9].
5. Future Property Suitability
Location Considerations
A property's location plays a crucial role in both your day-to-day life and its long-term financial potential. Here's what to keep in mind:
| Location Factor | Key Points | Long-term Impact |
|---|---|---|
| Transport Links | Access to public transport, motorways | Saves time and reduces commuting costs |
| Education | Nearby schools and universities | Meets family needs, boosts property demand |
| Local Amenities | Shops, cafes, healthcare facilities | Enhances lifestyle, attracts renters |
| Recreation | Parks, sports facilities, entertainment | Builds community ties, adds value |
Properties close to strong transport links and essential services often show better value growth over time [13].
Signs of Growth Potential
Understanding local development trends can help predict a property's future value. Look for these signs:
- Approved infrastructure projects by local councils
- New commercial developments nearby
- Increasing property sales in the area
- Rising demand for rental properties
"When buying a home, it's important to make sure the money you're investing has the best chance of growing over the years. A good location can help." - HomeSell [13]
Planning for Family Changes
Your personal circumstances can change over time, so it's smart to think ahead when choosing a property. Consider these scenarios:
| Life Stage | Current Needs | Future Considerations |
|---|---|---|
| Growing Family | Extra bedrooms, play areas | School zones, safe neighbourhoods |
| Work Changes | Space for a home office | Zoning for home businesses |
| Retirement | Single-level layout, easy upkeep | Close to healthcare services |
| Investment | Rental income, subdivision options | Council regulations |
Balancing Lifestyle and Finances
Think about how the property fits into your financial goals, whether it's for living or investment purposes.
"Where you choose to live affects your lifestyle and your finances." - HomeSell [13]
To maximise returns, focus on:
- Reviewing local council development plans
- Identifying opportunities for property upgrades
- Checking zoning rules for future changes
- Calculating maintenance costs
For investment properties, study the area's rental market and tenant preferences. Locations with reliable transport links often maintain steady rental demand.
Conclusion
Making a well-informed property purchase requires careful research and planning. Property consultant Vaughan Wilson advises:
"Don't get emotionally connected to the decision. Make sure you make the decision with your head, you've done the math, and you know how much you're going to outlay." [1]
Before finalising any purchase, ensure you've covered the following areas:
| Assessment Area | Key Actions | Documentation Needed |
|---|---|---|
| Financial Readiness | Calculate mortgage payments, council rates, insurance | Mortgage pre-approval, budget plan |
| Property Condition | Inspect structural integrity, dampness, essential systems | Builder's report, LIM report |
| Legal Requirements | Review property title, zoning rules, building regulations | Sale and purchase agreement, property title |
| Location Analysis | Assess transport links, amenities, future developments | Council development plans, local area research |
These steps should guide a detailed final inspection. Visit the property at different times of day to assess traffic, noise, and sunlight. During each visit, pay attention to essential systems and overall condition [14][15].
Think about both your current needs and the long-term potential of the property. Consider nearby developments, possible maintenance expenses, and how well the property fits your lifestyle plans. By systematically addressing these factors, you'll be better equipped to make a sound investment.