Harcourts’ South Island Regional Manager, Jim Davis, comments on the Christchurch real estate market.

As we move into the festive season and the inevitable slow down of Real Estate activity that occurs in late December and over the early January period, it is interesting to read that the market commentators are now caught up with the reality of our Market this year.  The Blazing headlines in the Press property section this week.

“No Aussie-style property slump” this is exactly what we at the coal face have been saying for over a year now.  Christchurch, this strong steady resilient city of ours, has a real estate market that reflects exactly this.  When I run the figures for just the Harcourts offices in our city for the last year and compare it to a year ago the statistics are remarkably similar.  There are a few less consultants running around the city but those that are, have all performed a little bit better over the year.

christchurch real estate

You might recall that in October Canterbury recorded the best sale month for the last 10 years according the REINZ sales statistics. Today REINZ has just released the data that relates to the month of November, and the result is another strong month.

In November there were 620 recorded Residential sales here in Christchurch, the reported Median is $460,000 with an average time on the market of 32 days.  These figures are just slightly back on last month but that is not unexpected when you are following a strong Spring period.  There is no doubt that there is plenty of activity happening in our local market, strong sales are being recorded right up to the Christmas break and open homes are still well attended. However, it is a very balanced situation currently. Buyers have plenty of choice available to them, and from what I am hearing that choice will continue well into next year when the post -Christmas rush starts. This is based on the number of people already talking to our consultants about their plans post- Christmas.  With choice for buyers comes caution and options, hence the reason that property seen as overpriced by the market will be rejected and inevitably will sit until the price expectation of the owner is reviewed.

Auctions  continue to be our preferred marketing option, and in a balanced market such as we have now it is not unexpected that clearance rates “on the day” drop off a little bit.  We still seem to be having around 50% sold under the hammer and the another 20-30% sold subsequently usually to people introduced during the auction program.  This is the great part about Auctions , as a vendor you effectively get two chances.  The first opportunity is with the cash buyers, the second chance is with the rest of the buyers who are waiting and hoping a property doesn’t sell under the hammer.   This method has an advantage for both sellers and buyers, in that the process attracts the ‘cash buyers’ first off and for sellers this means certainty of sale if the price is right. For buyers it means the pool of potential competition is lower initially and they don’t have to worry about getting caught up in the “smoke and mirrors” of a multi-offer scenario.  So, can auction work for all parties and that’s why it is favoured by most people.

christchurch real estate

There is no doubt we will see the traditional Christmas slow down start to take effect in about a weeks’ time, but I have little doubt that there will be a burst of pent up activity on the scene as soon as everyone settles back in the New Year, and I think that is what the media market commentators are now realising. Our market place is a replica of Christchurch itself; strong, steady and resilient.

 

Real Estate Career: Are you looking for a career rather than a job?

Real Estate is an industry that rewards hard workers!  If you are wanting to build a strong career this is your chance. We are looking for motivated, self-starters who are passionate about building a rewarding career to join our award winning team.

You may be experienced or new to the industry, either way you will have the chance to enjoy exciting rewards and unlimited potential!

Our upcoming Careers Evening is a great opportunity to find out more about this exciting career. It is being held on Thursday 31st January, 6pm at Holmwood Auction Rooms, 397-399 Ilam Road, Ilam.

Topics covered include:

  • Why real estate
  • What costs are involve
  • What to expect
  • How Harcourts will help you succeed
  • Training & support provided by Holmwood

Holmwood Professional Development Programme

We are committed to developing all of our team regardless of experience to be ahead of their competitors in terms of training, market knowledge and skills. The Holmwood team join together in our dedicated training room to share ideas, learn from each other and listen to invited guest speakers. Topics are diverse and include professional development, business planning and scripts and dialogues.

To learn more register your interest by filling in the form below or calling Anna Penny Moore on 021 0466097

Harcourts Holmwood has a positive and long-term commitment to the Christchurch community. This year we have taken another step up! Not only are we contributing to the Christchurch City Mission’s ‘Walk of  Stars’ but we are also as a major sponsor of the Mission’s Christmas Lunch.

The Christchurch City Mission is one of those institutions we all wish wasn’t needed. Alas, the statistics tell a different story. Demand continues to rise, more are living on the fringes of society and we need to give a helping hand this Christmas.

With one family in five finding the expense of Christmas too much of a burden, it is a privilege to be able to support this important event.

We are aware that others might also like to contribute so we have set up a ‘Givealittle’ page. To access this page please click here or simply text “donate” to 206 to make a $3 donation.

Help us, help others this Christmas!


The Reserve Bank says risks to New Zealand’s financial system have eased over the past six months and it is time to reduce restrictions on mortgage lending.

Loan-to-value restrictions (LVRs), set by the Reserve Bank, determine what proportion of new lending can go to people with small deposits.

From January 1, up to 20 per cent of new loans will be allowed to be to owner-occupier borrowers with equity of less than 20 per cent.

At present, only 15 per cent of new lending can be to this group. Before the rules were first introduced in 2013, lending to low-deposit borrowers was about 30 per cent of bank business.

Up to 5 per cent of new lending will be allowed to be to investors with deposits of less than 30 per cent. At present the threshold is 35 per cent.

christchurch real estate market

Reserve Bank governor Adrian Orr said households were still exposed to financial shocks, due to their large mortgage debt burden.

“However, both mortgage credit growth and house price inflation have eased to more sustainable rates, reducing the riskiness of banks’ new housing lending. In response, we are easing our LVR restrictions on banks’ new mortgage loans. If banks’ lending standards are maintained we expect to further ease LVR restrictions over the next few years,” he said.

The rules have been credited with taking the heat out of the Auckland property market, particularly in relation to investor activity.

The Reserve Bank says risks to New Zealand’s financial system have eased over the past six months.

ASB chief economist Nick Tuffley said the move was more than he had predicted.

It would provide more stimulus to the market at a time where it was already buoyed by low interest rates, he said, and had shown signs of a late spring bounce.

“It should reinforce activity.”

Infometrics economist Gareth Kiernan said the relaxation for investors was a surprise. At 30 per cent, that is the same level of deposit required from investors as in 2015, when the rules seen to have little impact on investor activity.

But he said the Reserve Bank might assume that it could safely make the downward adjustment now without sparking the market back into life, because the “speculative heat” had been taken out over recent years.

The rules were first introduced in 2013 and have been tweaked many times since.

real estate market christchurch

Real Estate Institute (REINZ) chief executive Bindi Norwell welcomed the change.

“The fact that banks have the opportunity to increase the percentage of new lending from 15 per cent to 20 per cent of their total loan book means there is a chance for more first-time buyers to have access to lending that they haven’t previously had.

“We continually hear feedback from real estate agents around the country that with median prices rising to record levels in the regions that first-time buyers are just finding it too difficult save that deposit to purchase their first home and to get into the property market. Any window of opportunity for young couples to get a foot on the property market is to be welcomed,” she said.

“We also welcome the news that LVRs for investors have been relaxed from 35 per cent to 30 per cent as with the raft of legislation currently facing investors, many have announced their intention to exit the market. Today’s announcement may go some way to supporting the continued supply of rental properties across New Zealand.”

Kelvin Davidson, senior research analyst at CoreLogic, said the move could kick-start sales volumes, but it was not guaranteed.

“Despite the Reserve Bank’s loosening of LVR limits, an increase in lending is not a clear-cut outcome. After all, lenders may choose to continue on their cautious path, especially since today’s Financial Stability Report also highlighted the RBNZ’s view that ‘higher capital requirements are necessary, so that the banking system can be sufficiently resilient whilst remaining efficient’. In other words, a requirement in future for the banks to hold higher capital buffers would tend to dampen lending flows.”

BETTER MORTGAGE RATES?

At the moment, banks offer their “special” home loan interest rates to people with equity of 20 per cent and more. They have dipped below 4 per cent in recent weeks.

Buyers without 20 per cent not only miss out on the specials but also pay low-equity margins and premiums on top of standard rates.

Broker Bruce Patten said this month that someone with 20 per cent equity could get a rate around 4 per cent but a borrower with a 10 per cent deposit could pay about 5.5 per cent.

Banking expert Claire Matthews, from Massey University, said it was possible that banks could start to extend their specials to people with less equity.

The competition happening in the home loan market indicated they wanted to lend, she said.

“They’ll be able to do more lending to those people and may possibly be willing to encourage them more than they were in the past. On the other hand the reality is people with smaller deposits are more risky and it makes sense that they should be charged a higher rate. It depends on how willing they are to lend. If one moves then they others probably will because they can’t afford not to.”

The Walk of Stars is a chance for individuals and companies to show their support for the Christchurch City Mission by sponsoring Hollywood Walk of Fame inspired stars. The stars will be placed along Oxford Terrace (which is set to be one of the best spots in the city this Christmas) for all of December and January.

Harcourts Holmwood are delighted to once again sponsor a gold star on the Walk of Stars which represents a $5,000 contribution to the City Mission’s campaign.

If you are also wanting to support this incredible organisation please see timeline of events below and a link through to the City Mission’s website.

Timeline:

1st November – Campaign Launched

30th November – The first stars are laid down along Oxford Terrace

14th December – Last chance to buy a star!

31st January – Last chance to see the Walk of Stars

real estate christchurch city mission walk of stars

 

From 1st January 2019 Real Estate Companies will need to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009

What is AML?

A law passed in New Zealand called The Anti-Money Laundering and Countering Financing of Terrorism Act 2009, or “AML/CFT Act” as it is more commonly known. The law reflects New Zealand’s commitment in a worldwide initiative to combat global crime and reduce the impact criminal activity has within the global community.

How am I affected by the new legislation?

The legislation requires Real Estate Companies and other professionals to assess the risk they may face from the actions of money launderers and people who finance terrorism and must identify potentially suspicious activity.

To make that assessment, Real Estate Companies must obtain and verify information from our clients. This is part of what the AML/CFT law calls “customer due diligence” and is a similar obligation to that imposed on banks and lawyers who have been subject to this regime for some time now.

Customer Due Diligence Requirements

Customer due diligence requires Real Estate Companies to complete certain checks before we can list your property or business to sell. We will also require this information from our clients who have commercial property they wish to lease. The Act requires us to also take reasonable steps to make sure the information we receive from you is correct, we will therefore need to ask you for documents to verify this information.

For starters, we will need:

  • your full name; and
  • your date of birth; and
  • your address.

To confirm these details, documents such as your passport/driver’s licence or your birth certificate, and documents that show your address such as a current bank statement will be required.

Under the new rules, if your property or business is held in the name of a company, a trust, or has overseas ownership we’ll need specific information about the entity including the people associated with it, (directors and shareholders, trustees and beneficiaries) and source of funds.

If you have any questions please contact your salesperson or our AML compliance officer on email: johanna.blain@holmwood.co.nz

It’s competition time again!

There is only FIVE weeks until Christmas and we have a $50 Farmers voucher to giveaway!!

Competition rules as follows:

1. LIKE OUR PAGE
2. TAG A FRIEND in the POST (as many as you like!)

SHARE THE POST to increase your chance of winning!

The winner will be announced on Thursday 29th November at midday.

Only likes and tags on our Harcourts Holmwood Real Estate page will be included

competition win christchurch real estate

Bidding for and buying a house at auction can feel intimidating if you have never done it before but a little bit of preparation and homework can make the process far less stressful and more empowering

Pre Auction: Conquering Nerves – Visit an Auction

The simplest and one of the most helpful things you can do is go to a few auctions to familiarise yourself with the process and the environment. Consider doing this well before you’ve found a place you’re ready to bid for, so you can view the auction process and watch buyers bidding strategies.

Once you’ve found a property you’d like to bid for, see if you can find another auction called by the same auctioneer who will oversee the sale of that property. Anything you can do to make your bidding auction day more familiar to you will help you on that day. Feel free to ask the sales consultant you are working with to introduce you to the Auctioneer, but also talk the whole process through with the consultant, they will know you are interested in the property, they in turn will be keen to assist you to buy.

Bidding for and buying a house at auction can feel intimidating if you have never done it before but a little bit of preparation and homework can make the process far less stressful and more empowering.

Pre Auction: Due Diligence

So you’ve found a house you want to buy and it’s being sold by auction process. First things first, you have to do your due diligence. What this means is reviewing all of the information made available, assessing and ensuring that you are ready to make an informed decision. Typically the agent handling the sale will provide you with a copy of the Title for the Property and the LIM. Those two documents should be reviewed by your lawyer. You will also need to have a conversation with your financier or bank and particularly in Christchurch you will need to discuss with your potential insurer for the property.
The vendor may provide you with a Builders Report. Be aware, this is there as a guide only. It has been commissioned on behalf of the vendor so if there is anything missing from that report, or anything not correct within it, you will not have any comeback. For this reason, it can be a good idea to commission a Builder’s Report of your own.

Typically in Christchurch you will also you will also get documentation around what has happened to the house after the quakes and what has been done to the house. Your bank and your insurer will likely want to take a look at this just to make sure that any repair strategy has been carried out correctly. Particularly for older houses in Christchurch, spend some time looking through the reports, through the insurance documentation consider getting your own Builders Report.

Some buyers get frustrated at the expense of this process, only to not be a successful bidder and having to repeat the whole process with a new property. It helps to think about what the long-term cost could be of not completing that due diligence only to find something critical is wrong with the property. This due diligence process is vital in Christchurch now following the rebuild, do not bid on a rebuilt or remediated property that does not provide the necessary basic documentation of the repair strategy.

Jim Davis
Christchurch Regional Manager

Harcourts’ South Island Regional Manager, Jim Davis, comments on the Christchurch real estate market.

There is no doubt that our market place in Christchurch continues to throw up some interesting surprises. The release of the October sales results by REINZ has showcased the strength of our local economy.

October in our city produced some stunning results as our market continues to thrive despite what some market commentators are trying to get you to believe.  The hard figures indicate that there were some 631 residential sales last month, median days on the market is 36 days, and the median sale price lifted to $474,000.

To provide some context around the figures, the reported sales volume of 631 houses, is an increase of 23% in comparison to September and a massive 31% increase over October last year.  This increase is a direct reflection and relates to what we have been saying for a few months now. The lack of new listings coming on the market over the winter months resulted in the low sales figures that we had previously been experiencing.  These figures were not so much a reflection of a poor market, but rather a reflection of a shortage of stock, as we commented on many previous occasions. Now as we see an increase in available property for buyers to look at, they have been busy again.  Consequently, we have seen a lift in the sales volume as the buyers have more stock to look at in the market. What will be interesting is to see how long this activity lasts for. There is no doubt in my mind we can expect to see the current activity continue right up till the Christmas break and potentially beyond. Quite simply, the current level of interest in open homes indicates that there is still a good amount of buyer activity to come.

reale state christchurch

The days on the market in recent months has stretched ever so slightly to 36 days. To my mind this is simply a reflection of the fact that there has been an inexplicable drop in the amount of property marketed by Auction.  This phenonium surprises me in this market, and I feel this reflects more on the attitude of the sales consultants rather than the attitude of vendors.  It seems a shame that the method of sale that offers the best benefits to both buyers and sellers has lost some traction.

The reported median price for Christchurch has lifted to $474,000 which is a significant jump and the highest reported median for our city. This does not reflect that prices have taken a considerable jump in recent months. I believe it simply reflects the lack of stock and sales of higher value properties in  previous months and now we are seeing catch-up occur in this sector of the market, consequently with it comes the lift in median value.

Christchurch Real Estate Agent

So, what can we expect in the next few months, as mentioned I believe we will see strong sales through to the Christmas break period. I believe that the sales consultants prepared to work through the Christmas period will see some good sales result for their extra effort.  After everyone gets back in the new year, I can see no reason why the current activity won’t continue.

The economic indicators for the country are strong, interest rates remain at all time lows, whether despite or because of Trump the USA economy is rapidly expanding, and with it we should see economic activity across other economies.

The recent changes introduced to slow overseas buyer activity will have minimal effect in a few months, as we are still seeing strong immigration levels and so many of our migrants will simply just wait until they have gained residency before they will purchase. Internally we see confidence levels growing in our own business communities as the Government and the country are continuing to show strong economic results.  When you take this all into account there seems to be no serious reason to think things will change greatly.

Christchurch City of Choice - Cranmer Garden Real Estate

Locally Christchurch is in very good heart, our city is looking fabulous, and with the completion of the library and the progress made on the convention centre construction, we are really starting to see our city return.

There is still plenty of opportunity for you to complete a property transaction between now and Christmas, should you require assistance, advise or just starting to think about your real estate plans for next year, give us a call today.