Reports vital for would-be sellers
Homes on TC3 land are selling for better prices but the process can take longer, as LIZ McDONALD discovers.
Prices for homes on TC3 land have begun recovering as buyers seek out good deals in a heated market.
After the earthquakes and land classifications in 2011, prices fell for TC3 sites (the most damage- prone technical category 3), as uncertainty over land status and foundation requirements spooked buyers, insurers, and banks.
However, real estate agents say they are seeing increased interest, while sales figures show prices have regained some lost ground.
Real Estate Institute Canterbury spokesman Tony McPherson says investors and first-home buyers have been increasingly in the market for TC3 homes.
Research from the valuers at real estate firm Knight Frank on 2400 sales shows the average sales price for TC3 properties in 2011 was only 94 per cent of rating value, but rose to about 98 per cent of rating value in 2012. This compares with 102 per cent for nearby TC2 sites.
Knight Frank valuation director Will Blake says the company's data shows the gap between price and rating value differs markedly according to suburb.
Prices for TC3 homes in Strowan, Burnside, Bryndwr, central Christchurch and Shirley were the farthest above rating value, while Riccarton, Edgeware, Aranui and Wainoni were the farthest below.
Knight Frank says its research shows real estate agents are finding TC3 properties take more work to sell because of the stigma attached and because lenders are cautious. However, the agents report success, and emphasised the need for sellers to provide thorough reports. Homes in the suburbs of Fendalton, Merivale, Strowan and Parklands were selling especially well.
Blake says Knight Frank decided to collate data on TC3 sales because there was very little information around.
He said last year "saw a significant recovery of values across all of the suburbs studied, with the majority very close to, or exceeding the Christchurch city average".
The research showed the slowest TC3 homes to sell were in areas such as Avonside, Burwood, Christchurch central and Wainoni where red zones are near by. The fastest selling were in suburbs such as St Albans and St Martins, where no red zones are close.
TC3 homes sold in a median of 33 days across the city last year.
Knight Frank also questioned insurers and banks, and found they would consider taking on TC3 clients on a "case-by-case" basis. Lenders typically wanted a scope of works before agreeing to mortgages on TC3 homes, and one had lent up to 85 per cent of the sales price. Insurance companies said they were more likely to write policies on less damaged homes.