Welcome to 2016! After a well-earned break, we’re pleased to report that Team Griff has hit the deck running, having held its first two auctions for the year and taking on a number of new listings. We’re excited for what the year ahead may hold and are ready to assist you with your real estate decisions – whatever they may be.
While we don’t possess a crystal ball (or even some sophisticated forecasting algorithm) we thought we’d share our expectations and quasi-predictions of what the 2016 property market may look like. So here goes:
A steady market with subdued price growth
With Christchurch chalking up a mere 2.3% increase in residential sale prices (2015 overall median cf. 2014 median), we’d expect of more the same for 2016 as more properties are built and repaired properties come on to the market.
Westpac chief economist Dominick Stephens has a rather bullish outlook for the Christchurch market.
“My expectation was that Christchurch house prices would also fall but actually the last couple of months have belied that and there’s been a modest upward trend,” he said.
First home buyers more active
A combination of low interest rates and recent changes to KiwiSaver withdrawals has resulted in an up-tick of first-home buyer activity in the marketplace. This was backed up by strong price growth in entry-level suburbs such as North New Brighton, Avonside and Wainoni – all around the 7% mark according to Core Logic.
Builders and tradies to dominate the ‘as is, where is’ market
As earthquake repair work for EQC and the major insurers dries up, we’re starting to see a number of small-to-medium sized construction companies buying up uninsured ‘as is’ properties to repair and on-sell. In other words, they’re buying work for themselves. We see this subset of ‘as is’ buyers as the predominant players in this niche market for 2016.
The end (almost) of the fully furnished rental market
“It was good while it lasted but the end is in sight. The rental pendulum is now swinging more towards tenants’ desires than landlords’ returns, so take care if this part of the rental market dominates your portfolio,” cautions Harcourts Gold business owner, Lynette McFadden.
“Carefully considered rents and unfurnished are the order of the day.”
While Christchurch certainly won’t be the ‘rock star’ of the New Zealand property market, we believe 2016 will provide a balanced market for both sellers and buyers. The fundamentals of real estate marketing still reign supreme: presentation, promotion and price. Get these correct and the stage will be set for a stellar result!