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.
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.
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.
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.