Why Now Is The Time To Consider Buying An Airbnb

We’re going to talk about Christchurch here because the story is really quite compelling. The Garden City is in a funny period currently with a perfect storm brewing if you own an Airbnb type property. Two thirds of the city’s guest accomodation were lost in the 2010 & 2011 earthquakes, along with a loss of tourist numbers as the rebuild began. While tourism numbers were back up to pre-earthquake levels by 2016, rebuilding hotel rooms is not so easy. In addition to the three plus years it usually takes to construct a large hotel building, the wheels of commerce turned slowly as many struggled to make a business case for the level of investment needed to commit to a new hotel in a city many considered broken for years following the quakes. Covid didn’t help either, and it’s likely a number of new hotel projects were either delayed or scrapped entirely as a result of the pandemic’s devastating effects on tourism.

But, 2024 started to tell us a very different story that 2025 looks set to write more chapters of. While tourism expenditure across the board isn’t quite back to pre-covid levels yet, Christchurch’s visitor economy has well surpassed those pre-covid numbers. The value of international visitor spending in Christchurch for December 2023 set a new monthly record and reflected a 29% increase over the same time pre-covid. Tourists love our new city and new international links such as direct flights to the USA are increasing visitor numbers from different areas (USA visitors made up 31% of international visitor spend in Christchurch vs 17% in 2019).

So how does this knowledge help you as a property investor? Well we still are yet to see that surge of new hotels in Christchurch, meaning all these new visitors are turning to short term accomodation through platforms such as Airbnb. Hotel operators are starting to get the message, currently in the pipeline for the city is a refurbishment of the iconic Noah’s, and new hotels on Cashel, Manchester, Worcester, Durham & Peterborough streets, which would add a thousand rooms between them (excluding an additional four new hotels to be built around the convention centre by Carter Group). However, as mentioned these things don’t happen fast and sometimes don’t happen at all. One of those planned hotels, set to go up on the corner of Cashel & Manchester Streets first hit headlines in November 2023, and we haven’t seen any activity on that site to date. Yet while these hotels wait to come, the tourists aren’t, and they need beds to stay in right now.

It’s for this reason anyone who owns an Airbnb property in Christchurch is laughing their way to the bank, we’ve recently transacted an affordable apartment in the city centre which has been appraised with a gross yield of 8.65%, or 9.95% once GST has been claimed back. That appraisal used an 80% occupancy rate which is highly conservative, our customers own other properties in the same building which over the past six months have been occupied between 96% and 100% of nights.

The message is clear and simple, this is where the opportunity is right now. We’ve highlighted Christchurch as a case study, but there are many other locations around the country seeing similar numbers. Now is the time to capitalise on the high cashflow gains to be had from what we expect to be a number of years of this level of short term rental demand.