Canterbury Market Report

CANTERBURY MARKET

The past three months have seen a paradigm shift in the real estate market in Canterbury. It was clear in the early parts of April and going into May we were seeing traditional winter seasonal markets with activity in both listings and sales slowing – which is normal around these months. The true shift occurred in June when both sales and listings picked up to levels not seen since the early post COVID months.

What drives such a rapid change in real estate from month to month? In this instance from May to June appears that some of the activity was based on a shortage of property for sale which for an extended period from around February this year through to the end of May we have seen declines in listing numbers, essentially meaning there was little choice for purchasers. So, in June when we saw more properties listed there was more choice for buyer causing a jump in buyer activity pushing the sales figures for June up in comparison to previous months.

Some of the change in activity can be attributed to a settling down of key indicators in the market such as the OCR remaining unchanged for the first time since August 2021 which is a positive for those looking to borrow. In short, it is clear with certainty around interest rates peaking over this quarter or very much close to peaking has given everyone the certainty they need to make a real estate decision. Add to this strong positive migration over the past year for the first time in three years, the picture becomes much clearer as to why we saw such a shift in activity in the last three months.

Recent Statistics New Zealand figures released during the quarter put the Christchurch population growth to be around 15% by 2048 with the Selwyn district projected growth to be at 47% over the same period. This suggests the demand for housing both new and existing will continue for the foreseeable future.

Looking forward – July has been active with buyers continuing to act. Listing numbers have again slowed slightly, which is expected as we come into the traditionally busy spring months. Auction results are also a strong indicator of what is happening in the market and over the past 8 weeks we have seen almost 100% of properties auctioned selling under the hammer or with a few weeks of auction days – something that hasn’t happened for the past year or so.

In my opinion the market is good and if you do want to make a real estate decision please get in touch with one of the Four Seasons team – we are more than happy to help.

James Twiss Managing Director

As some New Zealand mortgage holders prepare to re-fix their mortgage in the next 6 months, many are likely to see their interest rates double from 3 per cent or less to more than 6 per cent. Before locking in new interest rates, it’s important for borrowers to know these 5 things.

1. Know when your existing fixed rate expires

Before your fixed rate term comes to an end, you’ll need to decide whether to refix your home loan at a new interest rate or change to a floating interest rate. If you choose not to re-fix or if you do nothing, your home loan will automatically switch to a floating interest rate the day after your fixed term ends. To plan your next steps, contact your mortgage adviser or lender at least 6 to 8 weeks before your fixed rate is due to expire.

2. Know what your plans and goals are

When deciding how long to refix, consider your plans and goals. Think about any changes to your current situation that could affect your home loan. For example, are you planning to sell your home, do you have a new baby on the way, are you changing your job or lifestyle? Each of these situations requires more flexibility so a shorter fixed term may be preferred.

3. Know what the different rate options are

Understand the difference between fixed interest rates and floating interest rates, and the pros and cons of each.

Floating interest rates:

• More flexibility allowing extra repayments.

• No break fee so you can fix part of your mortgage at any time.

• Repayments fluctuate with interest rate changes making it harder to budget.

• Rates tend to be higher than fixed interest rates. Fixed interest rates:

• More certainty with set repayments which can simplify budgeting and financial planning.

• Locking in a fixed interest rate ahead of an increase could save you money.

• No benefit if interest rates drop.

Information sourced from REINZ as at 17th July 2023

• Does not allow for any extra repayments or early repayments.

4. Know how your mortgage is structured

Splitting your home loan and spreading your risk over a few loan terms could help minimise the impact of higher mortgage repayments as interest rates continue to rise. At the same time, it’s important not to lock yourself into too long a loan term and potentially miss out on an interest rate downturn.

Before refixing your home loan, talk to your mortgage adviser about your current situation and what’s on the horizon for you both short-term and long-term, so you can decide on the right home loan structure for the coming two to three years.

5. Know what other lenders are offering

It pays to check what interest rates and incentives other lenders are offering before you refix with your current lender, and to compare your fixed interest rates to see how they stack up. Talk to your mortgage adviser about opportunities to renegotiate your fixed interest rates, or find out if refinancing is right for you.

As a large number of Kiwi homeowners will be rolling off fixed interest rates this year, rising interest rates and higher repayments will understandably be a source of concern. Keeping track of changes in fixed interest rates can be hard, and not all deals are advertised. That’s why it’s important to work with a mortgage adviser – such as those at Mortgage Express – who can help you compare lenders and interest rates to find the right financial solution.

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

Improved prices and faster results, that’s what June gave us!

While this came with a slight downturn in the number of sales from May, the energy around the market in Christchurch has returned. Though the figures don’t seem to indicate the full feeling of the shift, maybe there is a little more to come.

On the face of it, some dynamics of the market have settled down; such as OCR remaining unchanged for the first time since August 2021 and money lending policies now allowing first home buyers to reconsider a purchase level that until recently, they most likely couldn’t have gone to. Certainly, these points have helped repair faith in our market because first home buyers are a significant portion of sales month to month and in turn, it may allow current homeowners to make the life stage related moves that they desire in a more confident way, knowing a qualified buyer is likely to be out there.

While the current momentum is positive, it is unlikely we will be back to record prices from here. Interest rates have had their share of airtime lately and continue to have an impact. Both for those who have joined the market since 2020 (with the adjustment of the rate itself) and for many who are established in the market with the application of these rates to the current house prices if they move. Indications are these rates are staying for a while, give or take.

Recently Statistics New Zealand put Christchurch population growth to be up 15% by 2048 with neighbouring Selwyn projected at a 47% increase over the same period. This would suggest that demand for homes will continue.

As the election gets closer it is perhaps investors who have the most to ponder. Sit or sell? On 21 June Tony Alexander released survey findings that only 55% of investors intend to keep their property at least ten years or never sell. The appeal of owning a rental looks different these days with the loss of interest expense deductibility, brightline testing since October 2015, the introduction of the Healthy Homes Standards since July 2019 and the continuing Tenancy Law changes. However, regardless of the reasons these rules exist, we need housing for people who cannot or choose not to buy. Sure, rents have increased, but so have lending

LISTINGS BY REAL ESTATE COMPANIES

CHRISTCHURCH RESIDENTIAL JUNE 2023

TOTAL LISTINGS 1391

Data sourced from realestate.co.nz as at 13th July 2023. Whilst every measure was taken to ensure data is correct, errors and omissions excepted.

CHRISTCHURCH MARKET

ratios for investors, insurances and rates. If this is your thinking perhaps it is time, the buyers are out there! On the flip side of this, if you are in for the long game, ten years or more and could buy and hold, have you seen a better time to buy property in recent memory?

Not surprisingly the decision to sell for any reason is not made lightly. Less new listings have been coming to market, seasonally we expect this in winter, though there isn’t a result driven reason for this. We know many people are waiting for the election result. Could it lead to a saturation of properties for sale mid-October?

If you’d rather get in while its good, our Harcourts team can help you and maximise the value of your property in the selling process. Why am I so confident? Because they’re doing this for others right now. We’d love to hear from you soon.

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS

MEDIAN SECTION PRICE FOR THE LAST 12 MONTHS

MEDIAN RENTAL PRICE FOR THE LAST 5 YEARS

NORTH CANTERBURY MARKET

The North Canterbury median sale price in April was $660,000 being the same as at the end of the previous quarter. May saw quite a significant increase to $715,000 although there was a slight drop in June back to $694,000 as we headed into the cooler months. This is a modest increase of around 6% on June 2022 but approximately a 22% increase from June 2021. A little early to gauge but this could suggest prices are beginning to rebound.

A summary of the North Canterbury listings recorded midway through June Harcourts had 180 listings, this being 28.04% market share, up from 25.99% the previous quarter.

Buyer demand for well maintained properties in the area remains strong with a steady increase in sales over the quarter. North Canterbury recorded 279 sales which was up from 226 sales over the first quarter of the year. June recorded 109 sales which was an impressive increase from June last year which recorded 77 sales. April saw the median days to sell in the area being the least number of days on market in over 6 months. May and June saw a return to between 45 to 49 days to sell.

Rangiora continues to expand with large subdivisions, office and retail development and recreational facilities. It is all well supported with great access in and out of the city.

The thing I keep hearing is there is simply not enough listings to satisfy buyer demand. 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 take advantage of the rapidly approaching spring market.

WHERE OUR BUYERS COME FROM

Source of buyers

April - June 2023

Hurunui

Rest of South Island Overseas

Data complied by Harcourts Four Seasons for every sale from April - June 2023. Whilst every measure was taken to ensure data is correct, errors and omissions excepted.

NORTH CANTERBURY MARKET

SELWYN MARKET

As a leading real estate agency in the Selwyn District, Harcourts is committed to keeping our vendors informed about the latest market trends. With that in mind, we’re pleased to provide an overview of recent activity in our local market.

Despite minor fluctuations, the Selwyn District real estate market has shown strong resilience. A modest median sale price correction has taken place, but it’s important to view this within a broader context. In June 2023, the median sale price stood at $800,000, a slight increase from $790,000 in May 2023, indicating that prices are beginning to rebound.

Importantly, when we compare this with figures from three years ago, the median sale price has risen by a robust 43.1% from $559,000. This growth significantly outpaces the national average, and it underlines the strong long-term performance and value appreciation in Selwyn properties.

Looking at the number of sales and median days to sell, there is a trend towards an increasingly dynamic market. June 2023 saw 119 property sales, up from 112 in May 2023, suggesting a rise in demand. In tandem with this, the median days to sell decreased from 55 in May to 43 in June, a clear signal that properties are moving faster off the market.

The median list price of $759,000 in June 2023, slightly lower than the median sale price, hints at a favourable market for sellers. As properties are selling above their listed price, vendors can anticipate competitive bidding, and potentially a higher selling price.

Another key figure is the total sales volume, which has grown to $98,118,000 in June 2023. This 3.5% growth from the previous month suggests that the overall wealth generation in Selwyn’s property market is on an upward trajectory.

Selwyn District’s real estate market continues to demonstrate strong potential for property vendors. Encouraging growth indicators suggest that now may be a strategically advantageous time to sell. Harcourts, as an experienced and dedicated agency, is here to guide you through the process.

We encourage those considering selling their property within the next six months to reach out to us. With our extensive knowledge and commitment, we aim to help you achieve a premium price in the sale of your property in the thriving Selwyn District market.

$650,500

The REINZ data for Christchurch in June tells us the median sale price achieved by all companies was $650,500 Harcourts data tells us we achieved a median sale price of $690,000. That’s a $39,500 difference!

Sourced from REINZ median sale prices for June 2023.

ALL REAL ESTATE COMPANIES

Four Seasons Realty

SALE PRICE HARCOURTS VS ALL REAL ESTATE COMPANIES

SELWYN MARKET

MEDIAN HOUSE PRICE FOR THE LAST 12 MONTHS MEDIAN SECTION PRICE FOR THE LAST

RENTAL PRICE FOR THE LAST 12 MONTHS

RURAL LIFESTYLE MARKET

An early winter and very wet weather has not dampened our Rural Lifestyle market which has continued to experience solid buyer interest, even with a lack of available properties the biggest challenge.

The interest from Cantabrians and families relocating into Canterbury has never been more evident. With good quality offerings within 25-35 minutes from the city fringes continuing to achieve excellent results for our vendors and taking no time at all to find their new owners.

From a very unsettled period in our lives the desire to look after our own has become a real mind focus for many buyers looking at ways to accommodate extended family and young families endeavouring to create a meaningful, safe and rewarding lifestyle, swelling the interest in both North Canterbury and Selwyn rural settlements.

Market activity indicates a steady sales period with the last quarter (April-June) indicating a modest medium price value increase of 4% in North Canterbury and a 22% increase in unit sales growth. Selwyn recorded a small decline in medium property sales value of 3% and 5% in sales volume. Overall our market has experienced a 10% growth in unit sales over the last quarter giving a positive lead into the last half of 2023.

With spring now fast approaching the demand will only get stronger with the selection of available properties at it’s lowest in many years. If you are considering a move the time has arrived to talk to your local real estate expert to ensure you enter the market at the right time to capitalise on the new buyers that are in constant contact and looking for their next investment.

As quoted in our North Canterbury and Selwyn brief, the market is seeing excellent value in the quality and value for money our market offers. Well maintained, complete lifestyle holdings are seen as solid investments and life

changing experiences that suburban city dwellers and out of Canterbury buyers are finding positive. With many aspects of our economy stabilising, banks rates more predictable, elections soon to be out of the way we are confident the Spring through to Autumn 2024 will be a busy time for buyers and sellers.

RURAL

& LIFESTYLE MARKET STATS

SELWYN LIFESTYLE MEDIAN SALE PRICE FOR THE LAST 12 MONTHS NORTH

COMMERCIAL PROPERTY UPDATE

We’re almost halfway through the year and the commercial property market outlook for the rest of the year is looking increasingly positive.

Despite the expected slowdown of activity in some areas of the commercial property market due to interest rate increases, the lack of appetite by banks to lend on commercial investment and the impending general election, experts predict that by late 2023 business will be back on track with the market expected to experience a sustained level of demand and activity across all sectors.

We have found that with construction costs continuing to elevate, and capital not so freely available, developers are finding it difficult to build quality buildings at a price that enables them to be sold or leased at a rate that is profitable. Either building costs need to decrease and/or rent rates increase to allow developers to come back into the market and down the track into 2024 we expect to see demand exceeding supply in the industrial building market. Enquiry level is increasing on office space, as it is on quality warehouse leases, and we are receiving a lot of enquiries from owner occupiers wanting to invest in commercial industrial property. These buyers understand that a quality asset will protect their long-term investment, and assets that display stability with good cost controls will always continue to perform.

The ongoing infrastructure investment in roading, arterial routes and development projects has proven to be a major benefit to the commercial property

Information sourced from REINZ as at 17th July 2023

market in North Canterbury. This has enhanced the connectivity and accessibility of the Waimakariri region underpinning it’s continued growth in popularity as a desirable location for key businesses in storage, supply chain, modern warehousing, and logistics. The upside of this is an increase in the attractiveness of commercial properties located in these areas which will drive demand and rental yields, providing confidence and strength to the commercial market.

Prime locations such as Rangiora township with high foot traffic are in high demand as they provide solid investment returns. Recent investment in the upgrading of buildings and facilities from both the private sector and the WDC, is continuing to allow the Rangiora township to offer a unique and vibrant boutique retail experience. The recent extensive upgrading of Good Street with new office/business and retail tenancies becoming available later in the year, will continue to bring opportunities for landlords and investors who own quality retail properties in strategic locations.

All signs show that the North Canterbury commercial property market is well positioned for growth and with demand increasing across key sectors, investors and landlords can expect to find attractive opportunities in the years ahead.

If now is the right time for you to invest in commercial property, connect with a Harcourts Four Seasons Commercial Consultant today.

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