Subdivisions and new homes are outstripping traditional suburbs in popularity as the Christchurch housing market cools off.
The city has a shortage of listings and the market is being described as “relatively flat” compared to strong growth in Auckland, Wellington and even Dunedin.
One property expert said the average asking price for a North Island house was just over $650,000, more than $200,000 above the average South Island house.
The QV House Price Index for August shows the average price of an Auckland home has topped the $1 million mark.
Aucklanders are using their increased equity to snap up investment property or holiday homes in the South Island, Trade Me Property says.
- House price heat spreads to Christchurch
- Good news for home buyers for 2016
- Housing demand pushes price growth east in Christchurch
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Nationwide residential property values have increased 14.6 per cent over the past year and are about 25 per cent above the 2007 housing boom.
While the average New Zealand home is worth $612,527, Christchurch’s average value is $492,766.
Christchurch QV valuer Damian Kennedy said residents may be choosing not to buy and sell in the wake of the earthquakes and investors may be waiting to see what happens with the market.
He said the new build and subdivision market was experiencing the greatest level of sales activity and interest in Christchurch.
“We saw asking prices reducing earlier in the year, which have now stabilised. We have more new sections and homes coming on stream in substantive numbers.”
Kennedy said there was a shortage of properties for sale in Christchurch and listings were about a third lower than this time last year.
“Agents are hoping it is just a more pronounced annual seasonal slow-down we see during the colder winter months – people’s gardens don’t look as good in the winter and we are the Garden City so they tend to wait until spring before putting their property on the market.”
Kennedy said it was possible people were choosing to stay put after a “tumultuous few years” since the 2010 and 2011 earthquakes.
“Investors may also be waiting to see if the market picks up again now that the rate of growth has slowed from what it was in the first three years after the earthquakes.”
Home values in Christchurch are up about 3.5 per cent year-on-year, compared to Auckland’s 15.9 per cent.
Head of Trade Me Property Nigel Jeffries said the average asking price on its site last month was $657,850 for North Island homes and $430,150 in the South Island.
“We’ve seen evidence that Auckland property owners are increasingly considering a move to the South Island for lifestyle reasons, including shifting to greener and quieter pastures for retirement,” Jeffries said.
Aucklanders were using their increased equity to buy investment property or holiday homes in the South Island, he said.
Last month, Christchurch’s average asking price was $464,000. The West Coast’s average asking price was $262,850, down about 5 per cent year-on-year.
QV national spokeswoman Andrea Rush said there had been strong growth in Wellington and some regional centres, including Queenstown.
But by comparison, the Christchurch market was “relatively flat”, she said.
Harcourts Gold business owner Lynette McFadden said she would describe Christchurch’s housing market as stable, not flat.
“We’ve had an incredible run as people adjusted to the post-earthquake property scenario . . . there was a lot of energy and money in the market with people getting pay outs from their insurance company and so on.”
McFadden said Christchurch had some “good pockets” producing affordable homes, in northwest suburbs like Bishopdale, Redwood and Northcote and southwest suburbs, like Somerfield and Spreydon.
“You can still acquire in the mid-to-high 400s or just into the 5s. If Auckland looked at that, their eyes would water and they would think how lucky we are.”
“Anything is easier than Auckland.”
McFadden said the industry as a whole had experienced a quiet August but that should not be over-dramatised.
She agreed the investor slice of the housing market had cooled off and said additional compliance standards, like insulation, and new rent requirements had worked in favour of tenants.
In the Waimakariri district, values are up about 2.4 per cent year-on-year with the average value now $427,512. Selwyn district has experienced a slightly higher increase, bringing the average value to $555,546.
In Dunedin, values have risen 11.5 per cent year-on-year. Dunedin valuer Duncan Jack said demand remained strong in the city and there was “solid confidence” in the market.
The average Dunedin property value is $333,890.
- Values nationwide are 25.6 per cent above the 2007 peak
- Average value in NZ is $612,527
- Average value in Christchurch is $492,766
- Average Auckland house value has topped $1m
- Aucklanders turning to South Island to buy investment properties or holiday homes