Christchurch Housing Market -- Healthiest in New Zealand?

August 1, 2018

Recent numbers indicate Christchurch’s housing market is fit, healthy and a great place for first-home buyers to get on the real estate ladder.

In March we looked at the state of New Zealand’s housing market, asking if it was as bad as the picture painted by the ‘housing crisis’-focused media? We looked at CoreLogic’s report from January 2018, which noted that fewer investors and prices being flat for over a year had led to first-time buyers making up a quarter of purchases in the Christchurch market — the highest share they’d seen in 12 years.

In June, ChristchurchNZ’s Anna Elphick continued the theme, writing an opinion piece for Stuff.co.nz, outlining why she thinks Christchurch now has one of NZ’s healthiest housing markets. Rather than simply comparing Christchurch’s median house sale prices — $489,000 in May — with other regions, Elphick used several angles to tout both rental and housing affordability in the Garden City.

Christchurch Housing Market

 

Falling rents mean more disposable income

Citing falling rents over the past three years, Elphick noted that rental costs in Canterbury only take up 24% of the median household income, versus 29% in Auckland. According to her figures, the Canterbury region’s average weekly income experienced growth at a rate of 3.3% over the last five years, compared to 2.6% in Auckland and 2.9% in Wellington. 

 

Mortgage deposit and repayment affordability

Elphick dissected a Christchurch working couple’s ability to first save a deposit for a mortgage and then to cover mortgage repayments. As of April 2018, it was estimated it would take said couple four years of saving 20% of their weekly net pay to get together a deposit for a lower quartile Christchurch house. Based on a mortgage of $284,000 required for a house at the city’s lower quartile price, the couple would need to put $339.31 aside each week to cover their mortgage payment. This figure is 21% of their weekly take home pay. Compare that with the percentage of weekly take home pay required to achieve the mortgage repayment for a house in the same lower quartile elsewhere — 29.1% in Wellington, 29.9% in Hamilton and 41.4% in Auckland. 

 

Pretty picture for property investors, too

Not only focused on first-home buyers, Elphick also stated figures suggesting Christchurch is a smart place to own an investment property. Considering median real estate sale prices and mean residential weekly rent, Christchurch offers a 4.3% return on residential properties, compared to 3.1% in Auckland and 3.8% in Wellington.  


While she could easily be accused of bias, it’s hard to argue with the figures Elphick put forth. If you’d like to hear more about the lifestyle, employment and housing opportunities available in Christchurch, check out this blog, or contact us to discuss your needs.

 

Images:
‘The Lady in Red’ by Jocelyn Kinghorn under CC BY-SA 2.0.

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