|Property on Hand
|Average Sale Price
*Based on residential only figures
Hot off the press from the Harcourts MarketWatch, the Christchurch market has broken yet another record…
“For the first time in history the average selling price for a residential property in Christchurch [sold by Harcourts] is over half a million dollars, sitting at $507,681. This is up 19% on the same time last year and has jumped by 2.7% from February’s high.
Total listings are down by 16.5% and written sales are up by 13.7%, which indicates how competitive the residential market is. Demand for housing is outstripping supply.
Last month Reserve Bank Governor Graeme Wheeler increased the official cash rate to 2.75%, saying rising interest rates will have a moderating influence on the housing market. This is unlikely to be the case in Christchurch, where our rapidly growing population will continue to push prices up.
The same can be said for the loan to value restrictions (LVR),which have failed to have an effect on prices in the city. Theonly outcome is it is now more difficult for first home buyersto enter the market.
Auctions continue to gain traction in Christchurch, with auction numbers up 4.7% on last year. Vendors are seeing the value in letting the market determine price, rather than fixing, when demand is so high.”
Further to my comment from a couple of weeks ago where we mentioned that the Canterbury market was catching its breath – I’d say justifiably with these stats!
I guess the bottom line for the local Christchurch market is that the underpinning factors of high demand and a flush local economy continue to stimulate and drive these growth figures.
The message for any local purchaser, whether it be a first home buyer or an experienced investor looking to build their portfolio, is just do it, the timing is ideal!
When reading this on NZHerald.co.nz I asked myself whether Christchurch is fast following this trend with a market that is gaining incredible momentum and in frequent occasions experiencing intense competition amongst purchasers.
[Gareth Berry] went to his parents for a $200,000 loan and had no problem getting finance with banks offering 5.1 per cent fixed interest for three years. Armed with that cash he had a new top limit of $900,000 – but the search did not get any easier. A four-month battle through Auckland’s real estate auction rooms stretched Gareth Berry’s budget from $400,000 to $880,000 before he finally landed his first family home. Gareth Berry finally has his weekends back after nearly ‘losing it’ looking for a house.
Recently bidding at an auction via telephone for a client out of town, we experienced such competition. The bidding opened with the auctioneer at $480,000 followed by me hastily bidding at $560,000 thinking this will show our bold intent. How wrong I was, the next bid was a $90,000 increase of $650,000 which happened to be the upper level of my client’s budget, so needless to say our bidding strategy went straight out the window at that point. The property eventually sold for $737,000 – another Harcourts Gold success story and I’m imagining one very happy client!
Also in the latest issue of the Harcourts MarketWatch, which also indicates some interesting figures for the month of March. While it is understandable that March 2012 is a better market than 12 months earlier, auction numbers have increased phenomenally, while the number of available properties has dropped significantly. This provides a good indication of a strengthening market.
And something positive to finish on:
“Behold the turtle. He makes progress only when he sticks his neck out.”
March has been outstanding producing healthy sales for the month here in our Parklands office. With 25 successfully negotiated contracts to date for the month equating to an impressive $8.3m. This is a pretty good effort from our sales team who are set to finish the month strongly. New listings are currently running at 60% of sales for the same period which clearly indicates that demand is beginning to outstrip supply. This inevitably creates upward pressure on property values.
On a further note, by taking a look at this month’s Harcourts MarketWatch, it would be a fair assumption to say that Cantabrians are fast regaining confidence in the local property market. The figures say it all with new listings up $30.2%, written sales up 37.4% and the average sales price leaping 17.6 for the month.
So to continue on a positive note here is a quote that I’m sure you will appreciate:
“The greatest thing in this world is not so much where we are, but in what direction we are moving.”
– Oliver Wendell Holmes
In the latest edition of Harcourts MarketWatch it is interesting to note that with the exception of the Wellington region, all other regions benefited from and increase in written sales for the month of January. While January can be a fickle month (obviously Wellingtonians stay on holiday longer) there is unquestionably a positive trend emerging indicating higher levels of confidence throughout the country.
Harcourts CEO Hadyn Duncan states:
With a severe shortage of homes already in the main centres and no significant lift in new building consents, the competition for existing homes will continue to drive prices up further. Our property investor clients are also going to see continued strength in rental prices with the same issues prevailing.
The writing is clearly on the wall and confidence is returning to the overall national marketplace.
Signs of high demand for rental property…
As we know here is Christchurch demand for rental property has been unprecedented and at levels higher than has been seen for some years. This includes feedback of up to 40 people queuing for the same property, rising rents and the lack of supply in some high demand locations.
Personally, I have received a number of enquiries from investor clients who are beginning to show interest in extending their property portfolios. They are seeing the opportunities that Canterbury provides, especially so now with the rebuild beginning to regain momentum. It is my professional opinion that, bar any “major events” Christchurch is poised to begin a huge growth phase, with every indicator pointing to some strong capital growth over the coming years. Certainly worth thinking about and now is the time to take action before we see a hike in property values. The Property Investors’ Association website also makes for some interesting reading.
As per the latest edition of Harcourts MarketWatch for the month of October average sale prices in Christchurch were up a significant 7.1 per cent compared to October 2010. This reflects the pressure on available stock (which is down 14.9 per cent) and the vigor displayed by the current buying public. It is also interesting to note that written sales for the month were up 14.5 per cent clearly indicating that the Christchurch market is moving ahead with leaps and bounds.
As I have been indicating over recent weeks, with the current buying public so active and the statistics pointing in the right direction, now is the perfect time to make that real estate move – in fact I personally see no reason to hold off until the normally active New Year market. Worth thinking about, I think so?
Where to from here?
Are we heading for another overheated property market here in Christchurch? Is the current demand of earthquake-displaced buyers the beginning of the end for affordable real estate in the city? In my professional opinion, there is little anyone can do to stem the tide of intensity that the simple principle of “supply and demand” creates. I think it is good to see that “the powers at be” are fast tracking the availability of land which inevitably will take some of the heat out of this current building momentum.
I am currently running a promotion of a free upgrade in the Christmas/New Year Bluebook, so do be sure to speak to me on how this could benefit you and your property.
Here’s to another great week and a successful sale if you are on the market!