Christchurch's terraced homes struggling to sell as housing market levels

These two-bedroom homes at Pegasus in North Canterbury have been "reduced to meet the market".
LIZ MCDONALD/FAIRFAX NZ

These two-bedroom homes at Pegasus in North Canterbury have been "reduced to meet the market".

A flat housing market is threatening plans for high-density living in parts of Christchurch.

Rows of attached housing built to provide cheaper housing sit awaiting buyers around the city's commuter belt. Many are at marked down prices. Others advertised for sale off the plans have not been built.

With Crown-led projects including the 900-home east frame anchor project yet to begin, asking prices for attached townhouses are flat or falling in the city, according to Trade Me.

Mixed-density housing in Wigram Skies subdivision.
IAIN MCGREGOR/FAIRFAX NZ

Mixed-density housing in Wigram Skies subdivision.

At Pegasus in North Canterbury, two rows of double-storey lakefront terraced units are almost all empty. The three-bedroom units have been marked down from $559,000 to $515,000, and two-bedroom units reduced to $399,000.

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Double-storey terraced homes are also being advertised for sale in Halswell, Wigram, Prestons, Kaiapoi, and Rolleston. 

These homes, pictured in 2015, were built and sold in the Wigram Skies subdivision.
IAIN MCGREGOR/FAIRFAX NZ

These homes, pictured in 2015, were built and sold in the Wigram Skies subdivision.

Urban Edge valuer Natalie Edwards said Christchurch house prices levelling off meant first-home buyers could afford free-standing homes instead.

"We are starting to see an over-supply of those units in subdivisions as the housing market softens," Edwards said.

"This is the sort of housing we never used to see in the suburbs. It doesn't seem to be the Kiwi type of living. The target market for them was affordability. Now they are competing with stand-alone homes on larger selections." 

High-density housing, including apartments, remained popular in the inner suburbs and central city where amenities were close, she said.

Real estate industry figures indicate house prices in greater Christchurch have been flat in the past few months. Trade Me said asking prices for apartments were rising but townhouse prices were not.

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Quotable Value valuer Hamish Collins said good land supply within the city had dampened demand for high density homes in satellite towns and outskirts suburbs. 

"There's a lot of them on the market and they're just sitting there. There seems to be buyer resistance to them when people look at comparable costs of housing," Collins said.

"For $450,000 to $500,000 you can get a house and garden instead, or the same sort of unit closer to town."

Collins said high-density housing was selling well from Addington and Linwood right around to Richmond and St Albans.

"Sure they're attached and probably a bit basic, but the location makes them desirable."

Mike Greer Homes built the Pegasus units as the first stage of a bigger development, but company boss Mike Greersaid they "certainly won't be building any more of those". 

"We won't be undertaking any large multi-unit developments in Christchurch for the forseeable future. They're the first to be impacted with the slowdown because the market for them is price-driven.

"With a kind of over-supply of housing starting to happen, stand alone houses are coming back a bit in price, and that's making attached units less popular." 

Post-earthquake zoning rules have required a mixture of housing densities in bigger subdivisions. Developers embraced the concept as the cookie-cutter designs and smaller sites provided bigger profit margins than free-standing houses.

Lincoln University senior property lecturer Brent Nahkies said while high-density living in the central city was about lifestyle, in the suburbs it was about affordability.

"There is a market for it in the suburbs but it may not be very big. There's always a trade-off. People like room for a barbecue and a pet."

There was a difference between market-driven demand for high density living, and supply created "top down", he said. 

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 - Stuff

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