Christchurch Real Estate: October Update
Harcourts’ South Island Regional Manager, Jim Davis, comments on the Christchurch real estate market.
The release of the sales data for the month of October highlights once again that the Christchurch property market continues its seemingly ever upwards trend and the almost insatiable appetite for home ownership continues. There is no doubt that if you are a buyer looking to purchase in the current environment, it is particularly hard. Demand has shown little sign of abating, yet logic tells us that it should at some point in time. Interestingly the media recently told us that since the inception of MIQ 18 months ago, there has been in excess of 185,000 people pass through these facilities. When you hear a figure like that, it leaves no doubt as to what is keeping the pressure on the housing market right across New Zealand. Every one of these people needs somewhere to live when their time in MIQ is finished. Unless they already own a home in New Zealand or they are going to live with Mum and Dad, accommodation is required, and so it becomes a case of these new arrivals either buying or renting. This to me is the biggest influence on our market situation.
Despite all the commentary, dire warnings and predictions, the market continues to do its own thing and last month was no exception. Harcourts’ listing numbers were strong over October and we brought more newly listed property to the market than we did the previous October. However, as expected, the pressure on sales has continued and with more listings comes more sales. Consequently, the number of Harcourts settled sales was up a further 8% over October 2020 – a strong indication that demand has not slowed, and we are still listing and selling strongly within Christchurch.
With over 690 new properties brought to the market over October, it is pleasing to see that 62% of these were listed as auctions and the message is finally being heard by our clients. We know this method of sale produces the best sale result for our sellers, but it also provides the best clarity and transparency for the purchasers involved as well. It’s for these reasons that Harcourts promotes and advocates auction and are the market leaders in this form of marketing across the city, hence the reason so many of our sellers choose this option.
The frightening part for all buyers is that the average sale price of all the property Harcourts Christchurch sold last month is up a staggering 33% on the same month last year as buyers have chased the property market. The big question everyone is trying to answer is when will this market slow, stop or retract. Like a lot of people, I don’t see that happening for a while yet – not when there were still over 24,000 people who queued up and missed out on the latest MIQ offerings.
The release of the REINZ data confirms what our own Harcourts data has already told us. The opening paragraph on the REINZ report reads, “Property market rebounds in October as activity increases and prices remain strong”. Along with the statement, “October is the beneficiary of increased listings in the month prior. It is expected that sales activity across New Zealand will continue to rise in the coming months, as restrictions ease further, travel limitations lift and those who previously held back listing their property do so. The demand is certainly there.”
Looking specifically at the data around Christchurch City, the REINZ figures record 682 sales with a new record median sale price of $685,000 and the days to sell down to an average of 27 days. This figure of 682 properties sold is down almost 13% on the same month last year, a reflection that there is less stock available for other companies to sell as the market is increasingly choosing Harcourts as the preferred company to sell through. It is the ever upward march of prices that is the main concern. Commentators and specialists will no doubt pick the latest sales data apart over the coming weeks and theorise that the increasing interest rates will have an effect and slow or stop the market. The reality is they won’t, not yet and likely not in the foreseeable future. It will take something far greater in the economy to significantly slow these price rises in the short term, and no one wants or needs that.
As a seller in the current environment, you have plenty of options to consider, however it is imperative that you choose your final option carefully. In previous months I have talked about the benefits associated with selling via the Harcourts system. The old adage that you only get one chance to sell is never more important than now. Choosing the wrong method of sale with the wrong company or consultant might well result in a sale price that is tens of thousands of dollars below what is possible when you expose your property properly and to the whole marketplace. Selling off market, selling quietly, privately or choosing a company based solely on a low fee structure, are likely to be a recipe for disaster. In this type of market, there is bound to be more than one interested buyer.
Why sell to the very first one shown through the door or the one who makes the first offer? It just doesn’t make sense.
The information to consider before you make any decision:
• Median sale price for Christchurch City for October was $685,000
• Harcourts’ median sale price for October was $749,000
• The industry average sale price within the city for October was $801,307
• Harcourts’ average sale price within the city for October was $ 871,335
When you factor in that Harcourts have listed and sold over half the property in the city during October, then it becomes more apparent that to achieve the best possible sale price there is only one real option. Ensure you open your property to the whole marketplace to enable yourself to find the person who is prepared to pay the most – via Harcourts of course.