Short-stay rental dominance is hollowing out the inner city – and brokers advising Canterbury clients need to take note
The inner city of Christchurch gained 484 new dwellings last year. The number of people who moved in: 50.
That single figure, raised by Christchurch city councillor Nathaniel Herz Jardine, exposes a fault line running through the city's post-earthquake rebuild. Hundreds of new apartments line the inner-city streets. Green spaces sit empty. Foot traffic is sparse. Areas promised as vibrant, liveable neighbourhoods feel, in Jardine's words, like places of 'blankness'.
'There's no washing out. Where are the kids? Where are the families?' he said.
Short-stay rentals are crowding out Christchurch new builds
Jardine's diagnosis points squarely at the short-stay accommodation market. The Christchurch rebuild coincided almost exactly with Airbnb's arrival in New Zealand. Developers responded to those conditions.
Many inner-city apartments were designed from the outset to serve the short-stay market. It's a dynamic brokers should factor into new-build lending assessments in Canterbury.
Surge pricing on major event nights drives the decision. Concerts, Crusaders matches and fixtures at the new One New Zealand stadium can generate enough income to justify leaving a property vacant the rest of the year.
'The surge pricing on Airbnb and other websites,' Jardine said, 'is so extreme that as long as you hit those big nights – Robbie Williams, Six60 and the Crusaders – you can just leave it empty the rest of the time.'
The One New Zealand stadium is projected to generate more than $50 million annually for the local economy. But its impact is brief. On game days – at best once weekly – the precinct comes alive. Once those crowds disperse, the streets empty again.
What this means for brokers and their clients
For mortgage advisers working with property investors in Canterbury, the short-stay dynamic has direct implications. New-build apartments built for event-driven lettings carry a different risk profile to long-term rental properties. That distinction matters for advisers already tracking why buyers are leaving Auckland for Christchurch.
Jardine also noted that some new units entering the market are not genuine studio apartments.
'Some of the ones that are being built now aren't even really studio apartments,' he said. 'They just have a bed that falls down over the couch.'
He is clear that developers are not the primary party at fault. 'They're just doing what the market tells them,' he said. The blame, in his view, lies with central government for allowing this situation without giving councils the tools to respond.
The policy levers Jardine is pushing for
Jardine is seeking two changes. The first is a bed register and a bed tax that will tax property owners based on actual dwelling use, with revenue directed to local infrastructure. He says the Christchurch City Council has sought this for a decade.
The second is zoning authority – the power to designate areas as residential-only and restrict short-stay accommodation in those zones. This approach has been used in cities overseas, he says, and has restored vitality to inner-city precincts.
'As a council, we can actually say, "this area is for residents. We are not going to have any short stay accommodation in this area,"' he said. 'It brings vibrancy back to the inner city.'
Jardine says the window for action has not closed. Christchurch still has land available for medium-density family housing. Existing smaller apartments could house students and single-person households if incentives were realigned.
'We can have this amazing, thriving inner city if we just change the incentives,' he said. 'We still have a real chance to make this city work if we do something about it now.'
For advisers with clients holding or considering inner-city Christchurch stock, the policy landscape could shift quickly. Central government action on bed taxes or zoning reform would change that picture. Keeping across how Christchurch's broader property market is performing will be essential as that debate develops.
