Bob Jones gives some essential investment advice for those looking to invest in commercial property in provincial towns.
Provincial towns world-wide are in steady decline. New Zealand is no exception. There are good reasons for that and they won’t change. A foremost one is tertiary education, now being enjoyed by more than 50% of our kids and rising. Take a student heading to Victoria University from say Hawera and living in the capital for 4 years, completing a degree. Even if pursuing a conventional career such as accounting, law or medicine, never in a million years will he or she then return to Hawera for reasons I hardly need to spell out.
The consequence of this is evident in our provincial towns today where you will now see the same faces portrayed 500 years ago by Bruegel in Flanders. Friendly coves to be sure but don’t expect scintillating discussion. So too in other western countries.
There’s another fail-safe test. If you can spot pretty girls over 20 or young blokes in suits in their late 20s to early 30s in a town then its current prospects remain hopeful. Otherwise, both categories have fled to the big cities. As a keen student of such matters, only Dunedin gets a tick, that is if one categorises it as a provincial city. Try finding a pretty girl over 20 or a young bloke in a suit in say Wanganui or Timaru and you will look in vain.