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Mike Blackburn: construction market analyst on Airbnb rates in Christchurch dropping · Best of Business

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  Speaker 2: Now.
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  Speaker 3: Christ Church has so many Airbnbs that the market is
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  Speaker 3: actually struggling to keep up. It sounds like it's absolutely
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  Speaker 3: swamped by them. According to the analytics business AIRDNA, the
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  Speaker 3: average per night yield for airbnbs and christ Church fell
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  Speaker 3: slightly last year, and that's probably because the number of
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  Speaker 3: available Airbnb properties in the city went up by nineteen
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  Speaker 3: percent in twenty twenty four, demand only went up by
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  Speaker 3: five percent. Mike Blackburn is a property market analyst and
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  Speaker 3: with US High Mike Hiever, basically a case of supply
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  Speaker 3: and demand right, too many airbnbs there.
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  Speaker 2: Look absolutely. Christ Church is currently building almost seventy to
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  Speaker 2: eighty percent of all new residential construction is part of
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  Speaker 2: a multi unit development and the vast majority of these
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  Speaker 2: things are being marketed to investors, particularly in that Airbnb marl.
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  Speaker 2: And of course, the underlying story just goes back to
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  Speaker 2: what you were saying about Eden Park is that everyone's
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  Speaker 2: talking about the new stadium when it's going to open
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  Speaker 2: and the amount of traffic that it's going to drive.
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  Speaker 2: But we've been hearing this story from developers for several years,
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  Speaker 2: and the number of units that are being delivered into
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  Speaker 2: that market just continues to increase.
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  Speaker 3: What are you saying people are building future Airbnbs around
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  Speaker 3: the stadium?
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  Speaker 2: Are they absolutely? That's exactly how they're being marketed?
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  Speaker 3: And Mike, are they actually building houses with a view
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  Speaker 3: to turning it into an Airbnb? Nothing else like that's
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  Speaker 3: the primary point of building this particular house.
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  Speaker 2: That's correct. There are several developers in christ Church, and
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  Speaker 2: of course the thing is Heather is that in addition
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  Speaker 2: to tracking building consent numbers and population growth, one of
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  Speaker 2: the things that I look at is the median size
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  Speaker 2: of dwellings that are being delivered. I'm seeing some units
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  Speaker 2: and christ Church that are being sold into the market
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  Speaker 2: at thirty nine square meters with no car park. And
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  Speaker 2: these these are units that are part of twenty or
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  Speaker 2: thirty units in a block, and they're specifically being built
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  Speaker 2: and being marketed and sold as AIRB and B units.
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  Speaker 3: I see. Okay, Now that doesn't seem to me the
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  Speaker 3: smartest move because it doesn't leave you many options, does it.
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  Speaker 3: I mean, who wants to I don't know how many
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  Speaker 3: people actually want to rental or own a property that
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  Speaker 3: doesn't have a car park.
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  Speaker 2: Well again, if you were, well, there's there's two parts
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  Speaker 2: to the answer to that. Firstly, following the earthquakes, christ
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  Speaker 2: Church lost most of its significant hotel accommodation and so
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  Speaker 2: therefore over the last seven eight nine years we have
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  Speaker 2: been short of hotel accommodation, and so that's one of
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  Speaker 2: the reasons why airb and bs have flourished so rapidly
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  Speaker 2: in christ Church. But in what I've been seeing for
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  Speaker 2: the last couple of years is that the rate in
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  Speaker 2: which we're building these things, and this was supported by
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  Speaker 2: the aired DNA data that you talked about, is that
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  Speaker 2: the number of AIRB and B units is increasing significantly
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  Speaker 2: faster than the night stay accommodation. And unfortunately, Heather, I
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  Speaker 2: think there's going to be some tears.
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  Speaker 3: Now, tell me why you're not feeling as optimistic as
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  Speaker 3: the developers are about the pull of Takaha the stadium.
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  Speaker 2: Well, look, it's simply been the fact that we have
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  Speaker 2: built so many of these things for such a period
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  Speaker 2: of time. One of my market commentary pieces that I
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  Speaker 2: wrote a couple of months back was entitled how many
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  Speaker 2: is too many? And when you simply look at this
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  Speaker 2: from it from a business point of view. Notwithstanding, when
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  Speaker 2: I talk to real estate agents and property managers that
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  Speaker 2: they're actually seeing a decrease in the actual night stay
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  Speaker 2: accommodation and as a result, we're also seeing a drop
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  Speaker 2: off in the actual amount of revenue that AIRB and
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  Speaker 2: B operators can actually charge. And that's just simply market
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  Speaker 2: supply and demand. The more units that there are given
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  Speaker 2: a limited night amount of nights stay accommodation, everyone at
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  Speaker 2: the end of the day is going to see a
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  Speaker 2: lower return on investment.
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  Speaker 1: Yeah.
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  Speaker 3: Now, listen, Mike, it's good to talk to you. I
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  Speaker 3: really appreciate your time. That's Mike Blackburn, property market Analyst.
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