Canterbury Market Report

CANTERBURY MARKET

The last quarter of Jan-Mar 2023 we have seen a cooling of the weather and a cooling in real estate activity across the country. Most indicators are pointing to a slow down in listing activity, price growth and general sales decline everywhere except Christchurch and parts of Canterbury.

From what we can see Auckland has been hit particularly hard by a reduction in house prices and general disinterest in transacting property –understandable given the natural disasters of late. The Wellington markets have also seen a slow down in activity due to an overpricing of properties which goes for Dunedin and Central North Island markets. This has been reported as the market trend for the country but it is not exactly true. With Christchurch and regional Canterbury offering excellent value for money we have seen a strong increase in activity which has seen the last two weeks of March being some of the best activity in the past 12 months. The impression we have is that people are seeing some light at the end of the tunnel when it comes to interest rates topping out and house prices have steadied meaning people can still buy with the knowledge their investment will not reduce in price as has been seen around the country over the past year. All positive especially as we move towards the seasonally slow months of winter.

We are yet to see huge upswings in listing numbers but given the positive messages people are starting to hear I would not be surprised to see good listing markets for the next few months as people who may have been waiting for positive news decide to sell their properties and likewise those who have waited will look to buy whilst there is a chance of less competition.

Of particular note – the first home buyer market is once again positive with around 30% of purchasers

in the past three months being first home buyers in Christchurch. Experience tells me a healthy real estate market needs plenty of new buyers looking for opportunity at the lower price ranges in a market. Additionally lifestyle properties on the outskirts of Christchurch have been resilient, with activity and prices holding well through the very lean months of January and February.

I was asked the other day which method of sale to use in this market to which I answered auction, you showcase your home above the competition and give yourself the best chance at an unconditional sales, which is worth its weight in gold in a market such as the one we have today. We have seen an upturn in buyer activity in auction rooms with some excellent results being achieved week in and week out.

As a business we continue to work hard to achieve the best results for our clients and given our scale across the city and the region we are in touch with more people than any other company be it buyers or sellers. So if you are thinking of selling and want to expose your property to the most people then you must use Harcourts.

Pick up the phone and call your local Harcourts Four Seasons office.

James Twiss Managing Director

ARE YOU GETTING THE MOST COMPETITIVE RATE AVAILABLE?

As property sales continue to fall across many regions in New Zealand, in recent weeks, we’ve seen a flurry of heavily discounted “under the line” mortgage rates from some New Zealand banks.

Struggling to hit home loan targets in the wake of a floundering property market, some lenders were offering time limited deals on one and two-year fixed terms that were well below advertised rates, for new loans brought to the bank by mortgage advisers.

According to data received from the Reserve Bank of New Zealand Te Pūtea Matua, property sales have fallen well below historical levels not seen since the mid-1990’s. In December 2020 banks lent just over $9.6 billion in new home loans. In December 2021 that fell to $7.9b, and in December 2022, it was just $5.1b.

As more first home buyers enter the market encouraged by lower house prices, and some existing homeowners near the end of the fixed term portion of their home loan, it’s timely to remind borrowers of the importance of comparing interest rates to ensure they’re getting the most competitive rate available.

As a mortgage is likely to be your biggest financial commitment, and possibly the longest over your 20 to 30 year loan term, every dollar saved can make a significant difference. While the best home loan deal is often the one with the lowest interest rate, there are other features that are just as important in helping reduce the overall cost of your home loan.

Working with a mortgage adviser will help you to understand which of these features is likely to be most beneficial in helping you save money:

1. Extra repayments. Making extra repayments from time to time helps reduce your balance faster and save on interest.

2. An offset account. By offsetting money you have in your everyday bank account against your mortgage balance, you only pay interest on the difference.

3. Redraw facility. The option to redraw some of the money you’ve paid into your loan to use for other things, like travel, a new car, or a home renovation.

4. A split home loan. Fixing part of your home loan across a range of loan terms for certainty around mortgage repayments, combined with a portion of your home loan on a variable interest rate that offers flexibility to make extra repayments and redraw when needed.

One of the best ways to determine whether you have the most favourable interest rate available to you is to book a mortgage review with a Mortgage Express branded mortgage adviser. During your meeting, a mortgage adviser will assess your current mortgage and financial situation, and help you determine if there are more favourable options available to you that could save you money.

As Mortgage Express branded mortgage advisers work with a panel of lenders – both bank and non-bank –we have access to the most up to date interest rates and loan terms, and can help you make an informed decision about your finances and mortgage. Contact Mortgage Express to get started.

*https://www.corelogic.co.nz/news-research/news/2023/housesales-hit-40-year-low-amid-cost-of-living-crunch

Anthony Woolcott Mortgage Adviser

027 483 1131

anothony@mx.co.nz

mortgage-express.co.nz

Anthony Woolcott gives financial advice through Advance Mortgages Limited t/a Mortgage Express

CHRISTCHURCH MARKET

The uncertainty that is prevalent throughout the country currently is now showing up in our local market. The sales volume figure of 417 for Christchurch is the worst February sales figure record in recent times and possibly since the quakes. It’s not totally unexpected as the country responds to the economic factors that are affecting us all and follows the low volume levels we have seen across our city for a few months now.

The recorded median sale price of $675,000 supports the flat property values we have been seeing over the past year. There can be no doubt that prices are nowhere near the peak values achieved a year or so back, but we haven’t seen huge wholesale price drops either.

To date here in Christchurch, we are not seeing an overly huge increase in listed property, and we have yet to see anything resembling distressed sales. Currently the investment side of the market has slowed dramatically, so the potential and opportunity for distressed sales in this area of the market is a lot stronger than it has been for a while. While the first home buyers’ side was very quiet up until a couple of months back, there is no doubt there is now more activity happening here as the buyers start looking again, and we are seeing steady interest in the cheaper first home buyer part of the market. The regular home buyer portion of the market is slower and tighter with the drop in sales volumes. But there is little doubt that there is definitely an element of a “Mexican standoff “ occurring with some buyers and sellers having different perceptions of value in the current climate.

Another very interesting but positive aspect to

the current market is the real shortage of rental properties for tenants out there. Three or four bedroom long term rentals are in short supply and when they become available, they are being snapped up. Rental rates are strong and have no sign of slipping with this shortage. It makes you wonder how long it will be before investor buyers start relooking at this type of property especially when they realise there are special finance opportunities available from banks currently, as they strive for volume and market share in the slow loan market operating currently.

LISTINGS BY REAL ESTATE COMPANIES

CHRISTCHURCH RESIDENTIAL FEBRUARY 2023

TOTAL LISTINGS 1739

Data sourced from REINZ for the following graphs does not include section or lifestyle sales. Whilst every measure was taken to ensure data is correct, errors and omissions excepted.

CHRISTCHURCH MARKET

December 2022 - February 2023

Auction is still showing the way for owners actually looking to achieve a sale in this climate especially, as properties are now spending a lot more time on the market.

Harcourts, as the dominant company and brand in Christchurch real estate, continues to provide the results and the best sales opportunity for our clients in this ever-changing market.

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

MEDIAN SECTION PRICE FOR THE LAST 12 MONTHS

MEDIAN RENTAL PRICE FOR THE LAST 5

NORTH CANTERBURY MARKET

Demand for well maintained properties in the North Canterbury is strong, attracting well positioned buyers from outside the district. These buyers often see greater value in North Canterbury properties, that can’t be matched elsewhere. Lifestyle properties in particular are in high demand. Buyers from the north pushed the selling price of one recent property over $2,000,000, a remarkable $700,000 higher than when it last sold just 18 months ago.

Currently buyer activity is very good, particularly in the lifestyle market. These buyers generally have between $1,000,000 and $2,000,000 to spend. Winter is traditionally a quieter time, as some home owners choose not to bring their properties to the market, until spring. Even when the choice is limited, there are still buyers wanting to purchase.

There are 171 listings available in the Waimakariri and Hurunui districts, over a quarter of those are listed with Harcourts.

The Rangiora median sale price remained consistent over December/January, with a small 5% decline in February. This could be due to traditionally lower volume of activity over Christmas/New Year.

The median price in Kaiapoi has dropped slightly since February 2022, and now sits at $640,000. There are 75 listings in the region. That includes a number of spec homes in stages 5 and 6 in the Beachgrove subdivision. There are lots of buyers looking to buy in Kaiapoi but they can be slow putting pen to paper. Entry level properties are in most demand. Since September 2022, sales have dropped from 29, to 15 per month. In February this year, they’ve climbed back up to 24. We expect sales volume to continue upward, as interest rates flatten out.

Over the past few years, the most dramatic growth we have seen in the Hanmer Springs market has been the increase in the median value for sections.

It previously sat at $150,000 to $160,000 for around 15 years, but now sits at $460,000 (over the last 12 months). The median sale price for a residential dwelling in the village is now $818,000.

Traditionally there has been a high level of property available for sale in Hanmer. This has significantly reduced and remained low for the last 2 years, at present sitting around 40 properties available (this includes residential sections, dwellings and lifestyle properties). Currently we are experiencing very good buyer enquiry, however these buyers are slow in making a decision. I expect some will soon regret not moving quicker in making the call to buy.

Residential property sales in excess of the milliondollar mark are now commonplace, with no sign of prices easing in 2023. A recent sale at asking price in the Meadowburn subdivision (5/7 Keats Place selling in January for $1,150,000), is good evidence of this.

We have some very exciting projects and developments proposed for Hanmer Springs. Late in 2022, local developers secured a large farm on the outskirts of the village with the view to create a series of lakes adjoining residential and lifestyle options. While there is a lot of water yet to flow under the bridge (so to speak), they are working hard on the concept plans.

On the tourism front the Hurunui District Council is in the process of gaining approval for a “fly ride” off Conical Hill. Whilst there are not any guarantees it will be approved, if it does go ahead, it will be an exciting new attraction for the Village and will add to the already popular world class tourist attraction of the Thermal Pools and Spa.

In the commercial space, many existing businesses in the village have reported a very strong summer trading period. As there are a number of vacant

NORTH CANTERBURY MARKET

December 2022 - February 2023

premises for lease, there is ample opportunity for new operators to join the growing village.

Over the past 5 years the markets in the three villages - Culverden, Rotherham and Waiau have continued to thrive. First home buyers have been the main drivers, with affordability being the attraction. Many first home buyers have simply been priced out of the market nearer big cities or in the neighbouring town of Hanmer Springs. Combining the three villages, the median sale price is just $410,000.

Currently there is a lack of stock with each village only having 1 or 2 properties available. Historically, construction of new homes has been very minimal. This is slowly improving with a few new dwellings recently completed and more in the pipeline with several recent section sales.

While employment throughout the area is plentiful, and prices remain affordable, the North Canterbury area is a great place to invest.

Information sourced from REINZ as at 13th February 2023

SELWYN MARKET

The ever popular Selwyn had an up and down summer quarter – its medium sales price was $790,000 in November, rising to $830,000 in December, then dropping at the start of the year, and sitting on $800,000 in February. This is consistent with a flattening of prices over the last year, and prices now sitting at a 10% drop on the previous summer.

The most active segment in the Selwyn market seems to be 3 bedroom homes in Rolleston, and 4 bedroom homes in Lincoln and Prebbleton.

Lincoln and Rolleston have seen a large jump in listings coming to market during January and February. There is strong competition in the 4 bedroom 2 bathroom space in Lincoln in particular. Over half of 127 properties for sale are of this size, creating strong competition. In Prebbleton, two thirds of the 37 homes for sale, are 4 bedrooms. Rolleston’s growth continues to rocket, with over 300 listings for buyers to choose from.

Buyers from the North Island continue to shop in the Selwyn district. Our team has seen an increase in buyers showing interest from Auckland and Wellington, along with enquiries from other North Island towns. A digital marketing focus on the big cities up north appears to give Harcourts an advantage.

Forty homes were sold in Selwyn in January, rising to 73 in February. This is typical for this time of the year with January often a slow month simply

because buyers, vendors and agents are on holiday. The median number of days to sell was 69. There’s no better time than now to buy a newbuild investment property in Selwyn. There are terrific deals on offer as some building companies are struggling to move their stock, and get onto their next project. Harcourts has a number of new house and land packages coming to the market in Rolleston in the next 2 months, so get in touch if you’d like to get in before the rush! The return on investment on these looks good, and there is still solid demand for rentals in Selwyn.

The REINZ data for Christchurch in February tells us the median sale price achieved by all companies was $675,000 Harcourts data tells us we achieved a median sale price of $722,500. That’s a $47,500 difference!

SALE PRICE HARCOURTS VS ALL REAL ESTATE COMPANIES

SELWYN MARKET

December 2022 - February 2023

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

NUMBER OF HOUSES SOLD 181

MEDIAN SECTION PRICE FOR THE LAST 12 MONTHS

NUMBER OF SECTIONS SOLD 94

MEDIAN

DAYS ON THE MARKET 49

Information sourced from REINZ as at 13th February 2023

RENTAL PRICE FOR THE LAST 12 MONTHS

RURAL LIFESTYLE MARKET

December 2022 - February 2023

The rural lifestyle market has continued to experience solid market interest with a shortage of good properties the restricting factor over recent times.

When looking at our lifestyle market over the last quarter we have realised the resetting of market conditions and yet just as quickly we are now experiencing the comfort people now have in going forward and are now actively looking to sell or find property.

Purchasing a lifestyle property offers a wide range of demographic purchasers their desire to live in a less busy and cluttered environment. Young families looking for a more wholesome living, larger land space offering hobby interests and business options, others just looking to experience the peace of the country.

The development of Canterbury’s major arterial motorways has been game changing in bringing country to town. From most of our outlying settlements and lifestyle property clusters the commute to schools and community services is down to acceptable urban commuter timeframes.

With the value of properties steadily increasing the investment into the rural market is very sound and sort after. North Canterbury market rising 57% in the last 12mths ( medium sales value) and Selwyn rising by 22.7% (medium sales value). What also unfolded since covid lock downs and the climatic disasters in other regions of NZ is that Canterbury with it’s city rebuild and affordability has become an attractive destination with demand from people moving to our region being realised weekly.

With the economic outlook seemingly starting to level the comfort people will have to start looking again at their future living options will see more lifestyle

properties come to the market and provide the living environment many have been dreaming of. At Harcourts we have a team of dedicated rural lifestyle sales people that are available to help in each of the rural catchments areas. Our people either live or have lived in these rural areas and understand fully the services and amenities on offer in each area.

RURAL & LIFESTYLE MARKET STATS

SELWYN

MEDIAN SALE PRICE FOR THE LAST 12 MONTHS

There’s a massive shortage of rental properties available in Canterbury, and that’s putting pressure on good quality tenants.

PROPERTY MANAGEMENT UPDATE PROPERTY MANAGEMENT STATS

The rental squeeze is forcing some of Harcourts’ long-standing tenants to leave properties which they’ve rented for years.

In some cases, the owners are moving back into their rentals, forcing great tenants out the door.

That’s “pretty stressful” for them, according to HFS Business Owner Penny Lovell, who says the company “cares” for its long term tenants.

With the shortage of rental stock and house prices easing, there’s never been a better time to buy an investment property.

CHECK OUT OUR AVAILABLE PROPERTIES

WE LIST NEW PROPERTIES DAILY!

RURAL & LIFESTYLE PROPERTY MANAGEMENT

Information sourced from REINZ as at 13th February 2023

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

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

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

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

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

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

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

Rolleston Office 03 347 4711 rolleston@harcourts.co.nz Unit 13,70 Rolleston Drive, Rolleston

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