Christchurch Residential Property Market Update, February 2014

February 17, 2014

Market lift due to more than just property shortage

There are a variety of reasons why the Christchurch Residential Property market has enjoyed such healthy growth since the earthquakes.  Demand for residential properties continues to out strip supply, as more people arrive in Christchurch to work in the rebuild, plus people from the Red Zone looking to purchase replacement homes. Buyers are now much more motivated to make the deal happen.

Another reason that hasn’t received much press coverage during the growth period is that many properties have now had their EQC repairs and the owners are cashing in on the new improved appearance of their home. Some of the property owners have also taken the opportunity to make additional improvements by replacing dated fittings and exterior cladding where required.   We have received an increase in owners asking for appraisals of their property with many property improvements having been carried out.

According to the latest BNZ property survey, it is the return of the Seller’s market.  The Loan to Value ratio, according to the survey, has seen first home owners stepping away from the market, but the investors have returned due to significant improvements in rental returns. However, this could change if interest rates increase in March this year.

The Christchurch City Council will publish the new Rateable Valuations next month. The new valuations will continue the practice of ignoring earthquake damage when considering a property’s value. Revaluations will be based on recent sales for comparable properties, and of course where improvements have been made.  We can conclude from this that as prices rise the Rateable Valuations will also increase. 

Christchurch remains a unique market as the rebuild picks up pace. Where will the market stop? Our experience in Christchurch from recent events tells us that it’s impossible to predict the future, however, we think that the market will show properties selling at a rapid pace (in a number of locations) and prices will continue to climb but at a slower rate. 

Melissa Benge

Director First Avenue Property

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Filed under Christchurch Earthquake \ Real Estate Investment \ Rental market updates

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