Squirrel Mortgages Christchurch managing adviser Nathan Miglani says Kiwi buyers actually want a home not just what gets built.

Christchurch has always taken a different path to other major centres.

During the Covid-driven property surge, the city had modest growth without the frenzy seen across the rest of the country.

Even now, it remains one of the New Zealand’s most affordable main centres – where a three-bedroom, two-bathroom home in a decent suburb can still be found for under $700,000, Miglani says.

But affordability hasn’t protected the market from oversupply – particularly townhouses.

“In recent years, we’ve seen a wave of unit developments go up across the city. Many were driven by investors chasing quick returns or small-scale builders looking for a simple build.”

He says unfortunately, the outcome has often been the same – a surplus of plain, characterless boxes with little appeal to owner-occupiers.

In Squirrel’s Christchurch office fewer than one in 10 first home buyers are seriously considering a unit.

That tracks with TRA research where 72 per cent of buyers are buying to live in the home, not as an investment, and overwhelmingly want something that feels personal, flexible and long-term, Miglani says.

Buyers say they associate townhouses with a lack of privacy (39 per cent); poor design and sameness and cheap build quality (18 per cent).

“In short, they don’t see townhouses as family homes – they see them as compromises.”

Not all townhouses are created equal.

He says when they are well designed, in great locations and show some personality, they can work – particularly for buyers who see Christchurch as a stepping stone before heading to Auckland or Australia.

“We recently helped a young couple buy their first home here with exactly that plan,” Miglani says.

But the bulk of buyers are looking for a stand-alone home, with a bit of land, a space that reflects their identity and lifestyle, a flexible third room and off-street parking or a garage.

He says these preferences are echoed across New Zealand, but they are especially clear in Canterbury, where space is still accessible and lifestyle is a big driver.

Investor drop-off

The residential investor sector has shrunk, with rising expenses and interest rates putting pressure on returns.

While recent rates drops have eased some of that pain, the value of many new-build townhouses has dropped by $30,000-$100,000 depending on location and spec.

However, quality builds have held their value – proof that design, materials and market fit still matter, Miglani says.

“If there is a takeaway for developers here – build homes, not units.

“Get to know your buyers, design for families, not just floor plans, include a garage or at least good storage.”

He says developers should prioritise quality over quantity. In a market flooded with plain copy and paste developments, homes with character will stand out – and sell.

“The Canterbury market doesn’t need more boxes. It needs thoughtful, liveable homes."