Christchurch Real Estate: March Update

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

REINZ has just released the latest sales data relating to the month of February 2021. I am sure that the result will come as no huge surprise to anyone showing any interest in the property market either locally or nationally. The release of the latest data I am sure will bring even more pressure to bear on the government to somehow get involved to either manipulate or control what is happening currently right around the country.

The headline released by REINZ says it all, ‘Highest number of properties sold in a February month in 14 years.’

This headline is followed by ‘Sales volume up almost 15% compared to February last year, along with a rise in Median sale price.’ For the same period the national median sale price rose by 22.8% compared to the same time last year and 12 out of the 16 regions have experienced new record median sale prices for the month.

Here in Christchurch the trends shown by the of national figures are similar. There were 738 recorded sales for Christchurch, which is up a staggering 21% on February last year. Our Median sale price across all these sales now sits at a new record high of $581,000; also, up 23.4% on the same time last year.

Anyone out searching for property in Christchurch over the last few months will have no doubt realised and in fact seen and experienced this pressure that is occurring across our city.

For Harcourts the figures are equally as strong. February was a good listing month with the volume of fresh stock brought to the market being the highest number we have seen in the last 15 months. That bodes well for buyers, provided the levels of listed stock continue in this vein. Interestingly over 50% of all the new listings were listed as auctions. This is a sure sign that the marketplace has now recognised that in the current situation there are benefits to be achieved with this method of sale. In fact, it is noticeable now that more and more owners are actually specifying, they wish to sell by auction as their preferred method of sale. This method is also proving popular with buyers in the marketplace because they are at least able to see exactly what is happening with the property they are hoping to purchase and they can make a conscious purchase price decision, in comparison to the ‘stab in the dark’ option that other methods offer.

Harcourts actual sales number for the month was also stronger by 31% in comparison to a year ago, reflecting the strong presence and level of stock we have available to purchasers in the current market. The pressure currently being experienced is reducing the days on market figure across the country but in reality this is almost meaningless.

If a property is being marketed and sold properly, it should be presented to the marketplace, properly and in a structured marketing programme like an auction. Then over the three-week marketing campaign more buyers can get the opportunity to view and be able to make their purchasing decision.

Where to from here?

No one has a crystal ball but there are very few people predicting that the market will change much in the short term. While all the reasons that have created this market have been well documented previously, the fundamental reason is quite simply a lack of housing In New Zealand. We have more people wanting somewhere to live currently than we have houses available to house them. Additionally, we simply cannot build houses quickly enough with the current framework. Regardless of who buys the property that’s for sale, home owners, first home buyers, or investors, there are people wanting to own or to rent now and they will pay for that privilege. The issue for the government is that fiddling with one aspect of the market to place some sort of control or to appease public pressure, will always have an effect somewhere else. E.g., Curtailing property investors activity, means there are less homes available in the rental pool, potentially freeing up homes for say home buyers to purchase. This is all good until you consider that the average rental property probably has more people living in it than the average owner-occupied home. So curtailing investors will simply increase pressure in the overall market. There is simply no easy answer when we have more people than houses.

Christchurch and Canterbury is seen nationally as the most affordable region for housing stock, as we have had good housing growth occur following the earthquakes. But even now there is no opportunity to get large volumes of builders in from either overseas or from around the country, as all builders are flat out almost everywhere and Covid-19 restrictions on travel are limiting migration options.

With all this in mind, we can see no reason for our market to change much in the near future, so it is imperative that if you are selling in this market you employ and utilise the company with the largest team of consultants, who specialise in the auction method of sale, with the best trained consultants and auctioneers in the business, because once you are sold you are sold, and if you are selling, you want to be sure you achieved the top price the market is prepared to pay. To achieve that, I suggest you talk to Harcourts.