Canterbury Property Market Report

CANTERBURY MARKET

The warmer weather over the first 3 months of the year have seen a pick up in real estate activity. A lot of this increased activity can be put down to people holding back on making real estate decisions (either to buy or sell), in the last quarter of 2023, because of the economic uncertainty an election creates. Often people wait to see how the election plays out before listing their home or buyer their home as there are often election policy promises that may impact positively on what is often the largest decision a person makes – to buy or sell their home.

The election certainly had its fair share of promises designed to stimulate the economy and when all was said and done there seemed to be a sense of certainty that has given property owners and purchasers confidence to go out and make the decisions they were holding back on making in the last half of 2023.

The build up has caused listing numbers to jump, not only in Canterbury, but across NZ to numbers not seen for over two years. With choice in the real estate market comes buyer activity, which has been consistent since mid-January 2024. I read somewhere the description of the residential market currently is a goldilocks one, not a buyers or sellers’ market but a market that is just right. There appears to be price growth creeping back into the market and with positive discussions about interest rate declines which give confidence to sellers to accept fair offers on properties.

Interestingly the most active parts of our market appear to be those outside the city which are offering excellent value for money compared to the city, but

also suburbs with Christchurch that have excellent value are seeing their fair share of sales activity recently. By way of example, we are seeing strong activity in Rolleston, Hoon Hay, Hei Hei and Kaiapoi, all markets that offer real value for investors, first home buyers and down sizers alike.

We are now moving towards the traditionally slower months of winter but given the number of good listings on the market today we are not thinking the markets will slow dramatically and can see with proposed brightline changes coming into effect in July the market could simply roll through winter without any visible changes in pace.

Either way if you are selling, as above, price growth is evident in the market and if you are buying interest rate declines are beginning to occur - SBS Bank have signalled this with a three-year rate below 6%.

So, as every good real estate agent would say, now is a suitable time to be selling, if you need advice or assistance, please call one of the award-winning team at Harcourts Four Seasons.

James Twiss Managing Director

8 HOME BUYING MYTHS BUSTED

First home buyers navigating the dynamic New Zealand property market often face a plethora of myths and misconception. In a property market where factors such as location, demand and economic conditions play a crucial role, it’s essential to debunk these myths and help home buyers make informed decisions about home ownership. Read on as we set the record straight, by busting these 8 common myths surrounding home buying in New Zealand.

MYTH 1: You Need a 20% Deposit

Reality: While a 20% deposit is considered ideal, it’s not always an absolute requirement. There are options available for home buyers with smaller deposits, such as Government-backed schemes and specialised mortgage products, and it’s crucial to explore these alternatives to find a solution that suits your financial situation.

MYTH 2: You Should Only Buy a House You Plan to Live In

Reality: Your first home needn’t be your forever home, but it could be an important first step onto the property ladder. Buying a property as an investment could provide rental income and potential capital gains with the option to sell later and buy your preferred property.

MYTH 3: It’s Cheaper to Rent Than to Own

Reality: When comparing renting vs. owning, it’s crucial to consider the long-term financial benefits of home ownership. Over time, it’s possible to build equity in your home through home loan repayments and improvements in property value, which could provide you with a valuable asset for the future.

MYTH 4: You Can’t Get a Home Loan If You Have Other Debt

Reality: Having other debt doesn’t necessarily disqualify you from securing a home loan, as lenders will assess your overall financial picture, including income, expenses, and debt-to-income ratio. Even if you have other debt, managing your debt responsibly and maintaining a stable financial history can improve your chances of mortgage success.

MYTH 5: Now is a Bad Time to Buy

Reality: Trying to predict the ideal time to buy property can be counterproductive. While property values may have dipped in some regions, historically, property values in New Zealand have shown long-term appreciation. Focus on your financial readiness and

consult with experts to make well-informed decisions regardless of short-term market fluctuations.

MYTH 6: You Need an Excellent Credit Score to Get a Mortgage

Reality: While a good credit score is certainly important, it’s not the only factor determining mortgage approval. Lenders consider various factors, including income, employment history, and overall financial stability. So, even if your credit score is less than perfect, you may still qualify for a mortgage.

MYTH 7: All Lenders Offer the Same Deals

Reality: Lenders vary in their offerings, interest rates, and terms, which is why shopping around for a mortgage ensures you get the most suitable option. A mortgage adviser can help you compare home loan options and negotiate with lenders to find the most suitable mortgage for your needs.

MYTH 8: It’s Better to Apply Directly with Your Everyday Bank

Reality: It may seem convenient to approach your everyday bank for a mortgage, or you may believe that loyalty to your current bank will be rewarded with favourable terms. However, that’s not always true. Different lenders have different strengths, and the bank you’ve been with for years may not necessarily provide the most competitive mortgage options.

A broad spectrum of possibilities

Working with a mortgage adviser can open up a broader spectrum of possibilities. Mortgage Express branded mortgage advisers have access to a variety of lenders, including those lenders that may not be as well-known but still offer highly competitive rates and terms.

To explore a range of mortgage options tailored to your unique financial situation, that could potentially save you money over the life of your loan, talk to a Mortgage Express branded mortgage adviser today.

CHRISTCHURCH MARKET

The Christchurch residential property market has continued its recovery, with a further increase in sales for March 2024. There are several puzzle pieces yet to find their place in the near future, though these factors are likely to assist our Christchurch market to endure the remainder of 2024.

Year on year, the March median sale price was up 3% from March 2023, however the median price fell when compared with February 2024 from $721,000 to $701,250 in March 2024. This was largely due to around half of the cities sales occurring at $700,000 or below across the month. It does not highlight the premium sales that also occurred throughout the month in Christchurch, which saw the average sale price increasing in March 2024 both year on year and month on month.

The speed of sale dropped again in Christchurch from 31 days in February 2024 to 28 days in March 2024. This demonstrates that new listings from February were met with market-ready buyer interest in March 2024. While multi-offers and buyer competition did occur across the month, the success of many sales relied on one buyer, willing and qualified, to negotiate a purchase.

Christchurch saw a 9% increase in the number of sales from 610 in February 2024 to 665 sales over March 2024 and was 4% up from March 2023, the continuing incline is slow but shows a steady return of confidence and credit considerations slowly allowing more moves.

The market sentiment remains somewhere between flat and balanced depending on the property offered. More buyers are gaining finance approvals, though interest rates remain on the high side, and approvals

are still taking time. Once approved, many first-time buyers remain resistant to the reality of a property purchase, largely due to the restriction of lifestyle choices in the short term. Those buyers that make it work over the next 18 months to 2 years are likely to benefit from lower interest rates, home security and equity into the future.

We await 1 July to see the reaction to brightline changes, it’s yet to be seen if the exchange of investors getting out of the market will saturate us with entrylevel opportunities or be met with new investor enthusiasm seeking renewed interest deductibility.

LISTINGS BY REAL ESTATE COMPANIES

CHRISTCHURCH MARKET

OCTOBER 2023 - MARCH 2024

Currently the number of available properties on realestate.co.nz remains down from the Canterbury long-term average of 21 weeks, with inventory of just 16 weeks recorded in March 2024.

The government review of building costs, with the announcement that cheaper building materials may become more readily available, could have quite an impact here, given we recently became the second most expensive city to build in and we have the land available to build on.

The official cash rate remained the same at 5.5% at the latest announcement on 10 April 2024. The Reserve Bank choosing to hold, signals inflation has not yet reached the lower levels they are aiming for. The next review is in May with early forecasts stating that 5.5% will be the outcome again.

We are yet to see if the economy will fall for a third quarter and if Christchurch will begin to feel the full brunt of the recession, on top of the inflation pressures that have already been the cause of cautiousness. We can view the figures for March 2024 with optimism of where we have been, though it is with a justified level of precaution that all parties watch ahead of the winter market.

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

MEDIAN

MEDIAN RENTAL PRICE FOR

NORTH CANTERBURY MARKET

The North Canterbury median sale price in March 2024 was $725,000 being slightly up on the last 6 months from $712,000, but significantly up from the same period last year which was recorded at $660,000 in March 2023. There was a dip in December and January which would be considered quite normal given that activity is generally slow over the holiday season.

Sale numbers followed a very similar pattern with the number of sales recorded in March 2024 being 118 verses 104 in October 2023 and 86 in March 2023. This being a huge 38% increase in the monthly sale numbers over the twelve-month period.

A summary of the North Canterbury Residential listings recorded end of March 2023 Harcourts had 182 listings, this being 24.02% market share, plus 41 lifestyle listings being a 20.3% share.

The number of days to sell in March 2024 was in line with March 2023 being 42 however this fluctuated between these times declining as low as 35 days and as high as 55 days.

Buyer demand for well presented properties in the area remains steady however with the increase in listings it is important that new listings coming to market have a well thought out marketing campaign that is designed to showcase your property and attract as many potential buyers as possible.

Buyer enquiry from outside the district continues to be strong. Often these buyers are looking for a more affordable living option and better lifestyle

opportunities such as working closer to home or working remotely whilst taking advantage of outdoor recreation activities being right on their doorstep.

If you are considering a property change over the coming months now is a great time to talk with one of our experienced team members. They can appraise your home and advise on the best way to bring your property to the market and achieve the best possible result.

WHERE OUR BUYERS COME FROM

Source of buyers October 2023 - March 2024

Waimakariri Selwyn

NORTH CANTERBURY MARKET

OCTOBER 2023 - MARCH 2024

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

RENTAL PRICE FOR THE LAST 6 YEARS

NUMBER

SELWYN MARKET

The real estate market in the Selwyn District has remained robust and dynamic, showcasing resilience and adaptability in the face of various economic factors and market conditions such as high interest rates and political change. Over the past six months, from October 2023 to March 2024, several key trends and developments have emerged, shaping the local real estate landscape.

According to REINZ statistics, the median sale price for a residential dwelling in the Selwyn area has shown stability, with a negligible decrease of 0.84% from October 2023 ($831,000) to March 2024 ($824,000). Comparing to March 2023’s median sale price of $840,000, this represents a year-on-year drop of just 1.9%. This indicates a steady market, with prices remaining relatively consistent over this period.

CoreLogic data reveals that there were 1424 residential properties sold over a 12-month rolling period to January 2024, compared to 1303 residential properties for the same period in 2023. While sales volumes have not reached the heady levels seen in January 2021 (2079), there is a noticeable upward trend, indicating increasing market activity and buyer interest.

The 12-month rolling total for new residential listings in Selwyn as of March 2024 was 1000, which has remained relatively constant over the year. This suggests a balanced market in terms of supply, with listings meeting the demand from buyers.

Buyer demand remains strong across the region, particularly for new 3 and 4 bedroom dwellings. Competitive pricing on these properties is no surprise given plentiful supply.

Highlighted Sale: One notable sale in the period was 22 Penberley Road, Prebbleton, which was sold by Harcourts in March 2024 for $3,300,000. This sale is

remarkable for its price and the size of the dwelling, covering 391m² on a substantial 4,620m² section. This sale serves as a benchmark for the market, highlighting the potential for premium prices in the area.

Selwyn’s commercial sector continues to grow, with developments such as the i-zone & i-port covering an area of 188 hectares. This development, zoned by the Selwyn District Council, caters to companies involved in manufacturing, contracting, warehousing, logistics, and servicing Canterbury’s significant agricultural sector.

PRICE

$701,250

The REINZ data for Christchurch in March tells us the median sale price achieved by all companies was $701,250, Harcourts data tells us we achieved a median sale price of $735,000. That’s a $33,750 difference!

Sourced from REINZ median sale prices for March 2024.

SELWYN MARKET

OCTOBER 2023 - MARCH 2024

The future of the Selwyn real estate market looks promising, driven by significant residential developments in areas like Rolleston, Lincoln, and West Melton. These developments are attracting new residents from across the country & overseas, drawn by the area’s value proposition and quality of life. Selwyn’s growth trajectory remains unmatched, offering a compelling proposition for both buyers and sellers in the real estate market.

The real estate market in the Selwyn District continues to show resilience and stability with steady median prices, increasing sales volumes, and strong buyer demand. The outlook for the market remains positive, driven by ongoing developments and a growing appeal to new residents.

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

RENTAL PRICE FOR THE LAST 6 YEARS

RURAL LIFESTYLE MARKET

OCTOBER 2023 - MARCH 2024

After a warm and dry spring and then a stunning summer we have now moved quickly into a lovely mild autumn with the demand for good lifestyle properties at a premium. Our trading of lifestyle properties within the Selwyn, Waimakariri and Hurunui Districts has been buoyant reinforcing the value and quality on offer that so many are looking to enjoy.

Over the last six months the market has more than doubled in sales volume in both the North and South of Christchurch catchments on the previous period and with that the selling days on the market also reduced by 10 days giving an average day on the market of around 60 days. This uplift in the lifestyle market has been bolstered by many real good quality properties and the increasing numbers of buyers moving into Canterbury (Christchurch) to live or invest. Our buyers have come from various parts of the country; however, the really noticeable shift has been from North Islanders seeing the Canterbury region as an attractive place to relocate and invest based on value and the ease of living.

Lifestyle properties of 5-10 acres are always in solid demand with such easy access to and from the city into our three districts with the commutes of 20-40 minutes putting our purchasers into an amazing number of wonderful smaller settlements and towns that offer a great way of life and environment to bring up their families, offer space and facilities for hobbyists, enthusiasts, business or just space to enjoy and grow into.

So as we try and understand the real estate market we know that Canterbury is continuing to show it’s conservative nature. Business is extremely steady with no exceptional lifts or decrease that have made the rest of NZ uncomfortable. Our listed properties have not risen as the media have indicated, in fact the number of listed properties has stayed almost static and in-line with sales over the last 12 months.

What we are experiencing is the educated nature of the buyers within the market. Good property is well received, and, in many cases, competition is delivering a premium price for our vendors. Our buyers are using the now common digital resources to measure value well before auction, deadline or other sales methods and are very careful to feel comfortable in their offers. With the cost of building and maintenance repairs or a make over property less attractive. Vendors expecting a premium price need to be offering a quality product. Buyers are fickle at present and will move on to the next option with very little effort.

All the more important for you as a seller or buyer to be using a knowledgeable experienced salesperson who understands the rural lifestyle market and environment. They will understand the value of your properties infrastructure, services provided or not, land use and suitability, boundaries and responsibilities to name a few elements that will be critical in many transactions.

RURAL & LIFESTYLE MARKET STATS

SELWYN LIFESTYLE MEDIAN SALE PRICE FOR THE LAST 12 MONTHS

$1,500,000

$1,400,000

$1,300,000

$1,200,000

$1,100,000

$1,000,000

$900,000

$800,000

$700,000

$600,000

$500,000

NORTH CANTERBURY LIFESTYLE MEDIAN PRICE FOR THE LAST 12 MONTHS $500,000

PROPERTY MANAGEMENT

OCTOBER 2023 - MARCH 2024

The last six months has seen only a slight increase in new properties entering the rental pool, a balance after seeing some investor exits amid regulatory changes and rising costs. Anticipating positive shifts with impending Government policy changes, we are hoping to see investor confidence, providing tenants with more choices and greater stability.

Both our vacancy and arrears reports have been at record-lows, with the majority of tenants meeting rent obligations promptly or in advance. Demand for rental properties remains strong, indicating a vibrant market.

PROPERTY MANAGEMENT STATS

Belfast Office 03 323 6045 belfast@harcourts.co.nz 804 Main North Road, Belfast

Kaiapoi Office 03 327 5379 kaiapoi@harcourts.co.nz 154 Williams Street, Kaiapoi

Rangiora Office 03 313 6158 rangiora@harcourts.co.nz 15 Good Street, Rangiora

Hanmer Springs Office 03 315 7084 hanmersprings@harcourts.co.nz Shop 3, 12a Conical Hill Road, Hanmer Springs

Lincoln Office 03 662 9933 lincoln@harcourts.co.nz 6 Gerald Street, Lincoln

Rolleston Office 03 347 4711 rolleston@harcourts.co.nz 58 Tennyson street, Rolleston

PROPERTY MANAGEMENT

Hornby Office 03 349 9919 hornby@harcourts.co.nz 395 Main South Road, Hornby

Prebbleton Office 03 344 1994 prebbleton@harcourts.co.nz 2/573 Springs Road, Prebbleton

The Palms Office 03 385 0343 thepalms@harcourts.co.nz 39 Marshland Road, Shirley

Belfast Office 03 323 6045

Hanmer Springs Office 03 315 7084

Hornby Office 03 338 1138

Rangiora Office 03 310 6003

MANAGEMENT | DEVELOPMENTS