Why Christchurch has joined the property party
It’s affordable, there’s lots of new housing, the schools are great - Christchurch has a lot to offer.7 January 2021
For the past four or five years, Christchurch’s property market was relatively flat as the city continued its rebuild, but the housing market is now on a roll, according to the latest data and local agents and commentators.
Trade Me’s latest Property Price Index found year on year demand was up by one of the biggest amounts in the country – up 24% in Canterbury. Average asking prices, meanwhile, on homes in Christchurch, were up 5.7%.
The Christchurch market is seeing the most activity and buoyancy since after the earthquake, says Ray White Chief Operating Officer, Daniel Coulson. One property in St Albans had 80 groups go through in a very short campaign because the auction was brought forward, the bidding going well over expectations. Auctions were running right up until 22 December to feed the demand.
A lot of people who previously might not have moved out of one of the bigger cities, are now open and ready to move to a city like Christchurch, says Mr Coulson.
Christchurch Ray White agent, Chris Nielsen, says he’s seeing an incredible amount of inquiry, and homes are churning over very quickly. There are a lot more Auckland investors out buying, many of them looking for a better yield than their city has to offer.
In Auckland you’re spending $1 million on a property which would cost $500,000 in Christchurch, and you’re getting a better yield in Christchurch too, says Mr Nielsen.
“Buyers are making decisions a lot quicker, and they’re being more open to not having the perfect property. It’s a different mindset,” he adds.Mr Nielsen is helping buyers coming back from Sydney and other parts of Australia, as well as London, plus buyers from Invercargill, Wellington and Nelson. He’s marketing a lifestyle listing at the moment in Marshland with an RV of $1.26 million, a home nestled next to Styx River which might appeal to returning expats longing for the Kiwi lifestyle.
32 Panorama Lane, Ashley, Waimakariri, Canterbury
While there were 1800 listings for Christchurch in early December, now there are 1200, a huge drop off of stock, says the Ray White agent.
For a lot of buyers, their number one priority is buying a property, says Mr Nielsen. “They’re not going on Christmas holiday, they will start again after the 6 January listings start coming in.”
Mr Nielsen thinks Christchurch competes well against Dunedin whose property market was running hotter earlier this year.
“We’re central South Island, we’ve got an international airport and we’re a city that’s building to something spectacular,” he says, pointing to plans for a state of the art 25,000 seater Christchurch stadium.
A market, amazing to say the very least
Bayleys’ agent, Adam Heazlewood who sells at the upper end of the Christchurch city market, described the past few months at the end of 2020 as “amazing to say the least,” The listing numbers have remained low but the buyer activity has been overly high, he says.
The Bayleys agent had six auctions in mid December, five sold very well and the other one had multiple offers within a week. It’s a formula he’s been seeing a lot of.
There were lots of buyers from out of town at the auction, the two final bidders on one auction, one was from Wellington, the other from Nelson.
Mr Heazlewood says he’s had a lot of vendors coming to him about listings in January and February. “There’s some good supply but not enough to combat the level of demand,” he adds.
The buyers are from across the board, families, empty nesters, people on job transfers.
Most of the out of town interest is in the mid to upper price bracket, says Mr Heazlewood who’s marketing this architecturally designed property priced at over $939,000 in Mt Pleasant.
6 Craigieburn Lane, Mount Pleasant, Christchurch City
Price increases are happening property by property, says the Bayleys agent. Some properties bought in 2018 are being re-sold for 15- 20% more.
In Christchurch, auction has become the preferred method of sale in the market, adds Mr Heazlewood, with about an 80% success rate.
With Christchurch’s strong affordability this is its moment to shine
It’s as if it’s become Christchurch’s moment, say a number of property commentators.
“Christchurch is at a really good stage with the whole redevelopment of the city. People are seeing first hand that the lifestyle here is so much superior to the busy city centres,” says Mr Heazlewood.
The city’s good selection of modern homes is appreciated, there are so many “post- quake” constructions and people rate that, he says.
While median prices in Christchurch are rising, homes are still affordable and the supply of new homes is good, says CoreLogic senior property economist, Kelvin Davidson, a proud Cantabrian. Affordability in Christchurch is better than it has been for some time, thanks to low interest rates, according to CoreLogic data. And you’re getting a better quality house, says Mr Davidson.
Christchurch is a good illustration of what happens when you fast track land development, which opens up housing development, says the property economist. You can get a good mix of housing and have supply matching demand, says Mr Davidson.
It may have seemed earlier in the year that Dunedin had overtaken Christchurch with its hot property market, but Christchurch has joined the party and the market has started to rise, says the CoreLogic economist.
Different types of buyers are finding what they want in Christchurch and its environs, from first home buyers, to investors, families and retirees.
Young families are moving to the Selwyn district, specifically to the hot spot of Rolleston, says Mr Davidson. Rolleston, the largest town in Selwyn, is on the Canterbury Plains, 22 km south west of Christchurch, and it’s a commuter town to the city with a new motorway linking the two.
Rangiora in Waimakariri district growing fast
North Canterbury, with towns like Rangiora in the Waimakariri district, just 35 minutes from the airport, is another growth area feeding into Christchurch.
Mike Pero agent, Adrian Louttit, has just sold a very attractive lifestyle property in Ashley, Waimakariri in the $1 million and $1.2 million range. It’s on a smaller piece of land than the 4ha norm, on 0.81ha, with beautiful views bordered by Rangiora and Sefton.
Rangiora has seen huge growth since the earthquake because it did very well in the earthquake. It has two more large new subdivisions in the pipeline with another getting established, says Mr Louttit. There will be another 2,500 homes coming on in the next five years.
Mr Louttit’s real estate business is close to 400% up on the same time last year, he says.
You get more for your money in the Waimakariri district than in Christchurch and Selwyn, so a lot more buyers are coming to the area, he says.
594 North Eyre Road, Swannanoa, Waimakariri, Canterbury
“Rangiora is very appealing, you’ve got all your main shopping, cafes, entertainment and outdoor activities and Hanmer Springs is just an hour and a half away, he says.
The Canterbury economy and lifestyle
REINZ reported in December that 1,333 homes were sold in Canterbury in November 2020, an increase of 31.7% from the same time last year and the highest level of sales for a November month since records began.
REINZ Regional Director, Shane O’Brien says Christchurch has a great reputation for education, particularly secondary schooling and universities. And he says the drop in tourism didn’t hurt Christchurch as much as other parts of the country.
In terms of the economy, the region is all about the farming sector, he says. Farming is a very big part of the New Zealand economy and that’s come more to the forefront after Covid, says Mr O’Brien.
“It's going well, with more exporting, it’s employing more people and that adds to the appeal of Christchurch,” says Mr O’Brien.
And the Canterbury lifestyle? “We are a bit spoilt, we’ve got beaches, lakes, skifields, a lot to offer and good employment,” says the REINZ director.
Christchurch is meanwhile well served by a number of good quality building companies and buyers have choice,” he says.
“A lot of the city has been rebuilt but it also has wonderful history and older buildings too, adds Mr O’Brien.
Included in the region’s vibrant property market, the lifestyle property sector has been doing very well in recent months, says the REINZ director. Areas from Amberley to Darfield to Banks Peninsula are all benefiting from interest in these properties.
“A good number of people are making the lifestyle decision to live in the country,” says Mr O’Brien.
Colliers International agent, Mick Sidey, says demand for these properties is coming from Cantabrians, Wellingtonians and Aucklanders among others.
A lot of these buyers will have links to the area or they’ll have friends who have come down, or their kids are studying at university at Canterbury or Lincoln, he says.
They’re able to get good value. A five bedroom spacious home in need of some modernisation on a 4ha piece of land will typically go for a touch over $1 million, he says.