Is Christchurch property market slowing down?
There has been a cloud of uncertainty hanging over Christchurch property market and I get asked this question several times a day. I believe there are many factors that are contributing to the fluctuations in the current property market across the country; it’s not just the winter chill.
According to realestate.co.nz, the number of houses available for sale was up by 50.8% nationwide compared to same time last year. What does this mean to potential buyers? More choices and competitive pricing. If you are looking to buy your first home, go ahead and make that offer, this is the right time!
In Christchurch the median house price has increased by 1% since last year and it’s currently at $495,070 and Christchurch stock has increased by 4.1% since mid last year. I feel the market has seen the significant boom since the earthquake and it is now stabilising itself, I wouldn’t personally call it a slow down.
Christchurch city council has issued 3200 consents in 2014 at it’s peak building boom and it’s slowed down to 2100 consents last year, 2017 is already tracking below that. The increase in stock has been caused by the optimistic developments across the city and we can still see people out their building houses because it’s easier to get into, with the lower deposit etc, but it’s definitely adding to the supply.
We have also noticed that the investor activity has slowed down due to lending restrictions and currently we have a significant supply of rental stock in the city, it looks like the rental market is stabilising as well since the huge rental shortage we faced after the earthquake. We have seen the housing shortage, we have seen the mad rush to build new houses, insurance money being settled, landlords snapping up as is where is properties and plenty of damaged properties being repaired. We all knew when this rush is over, Christchurch market will normalise and it will become more affordable for first home buyers to step onto the property ladder.
I believe there is a combination of things that are contributing towards the current trends in Christchurch market, banks being careful and very strict about who they lend the money to, interest rates creeping up a little, Reserve bank lending restrictions and the upcoming general elections making buyers a little nervous with their highlight of housing issues across the country.
I do not feel the market is slowing down or the bubble is going to burst, I believe the buyers have more choices now and it just makes it a competitive and viable market to buy. I also see a trend in young people moving back to the city to take advantage of the affordable housing compared to other parts of the country. If you are a first home buyer, get out there and start hunting. In my opinion winter is perfect for house hunting, you want to find out how cold the house can get, not how warm it is during summer!
Al Nazar – Dynamic Realty