Steady Southern star

It may be one of New Zealand’s smaller cities, but that hasn’t stopped Invercargill’s housing market from being a top performer in recent years. Sure, the city’s house prices have not hit the highs that those in other areas have. Nor has its rate of growth belted along at the pace of others’ markets.

But Invercargill’s still affordable prices have seen very healthy growth, its yields have remained strong and its rental market has only got tighter. That has made it an increasingly attractive market for investors. In fact, heading into lockdown it was one of the markets to watch.

Post-lockdown, little had changed for Invercargill. It was thought the city’s market should fare relatively well during the Covid-19 prompted recession. That’s because it has a reasonably diverse economy and no major reliance on tourism, which is likely to protect it, CoreLogic’s senior property economist Kelvin Davidson says.

However, the region’s heavy reliance on the Tiwai Point Aluminium Smelter (which generates 6.5% of regional GDP) has always provided a reason for caution. And, at the time of writing, Invercargill has just been rocked by the news that the Tiwai Point smelter is going to be closed down.