Warning of glut of bigger homes

Last updated 05:00 28/06/2014

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In the midst of a housing shortage, greater Christchurch could be headed for a glut of big new homes.

The mushrooming rows of large houses in subdivisions have sparked warnings they are not what is badly needed.

Valuer Bevan Fleming said there were too many similar, executive-style houses going up. Priced at $400,000 to $450,000, they would not meet the bulk of demand, he said.

"They are all pretty similar houses and there are only so many people who can buy them - they're not affordable for everyone. They are not building the right stock."

"We are not quite at an oversupply [of big houses] yet, but I suspect that will change by later this year or into next year."

Fleming said biggest shortage was of "stock-standard three-bedroom homes".

"There's just not enough of those around."

He believed most of the workers coming in for the rebuild wanted smaller and cheaper dwellings.

Last year's census showed 22 per cent of all Canterbury homes had eight or more rooms, up from 17 per cent in 2001.

Canterbury homes getting building consent in the past two years cost an average of $313,000, excluding land, compared with $177,000 a decade ago.

The average floor size of new and rebuilt Canterbury homes in the last two years was 195sqm, with the biggest in Selwyn district.

John McDonagh, associate professor in property studies at Lincoln University, blamed the problem on building costs.

High land development and construction costs, including fixed costs which were not size-related, meant developers made more money by building big.

"Nearly all the supply being added is not where demand is going to be. They build as big as they can."

The bulk of the demand in Christchurch was for homes priced at $300,000 to $400,000, he said.

McDonagh believed the city needed more homes of the size seen in mid-20th century suburbs such as Bishopdale, Dallington and Avondale. Homes needed to be more modest, and this was not helped by covenants in new subdivisions specifying fancy homes.

Modular or pre-fabricated styles of housing could provide a more affordable option, he said.

McDonagh said a glut of big homes could have a positive side by dampening price rises. He also noted that in years to come, baby boomer owners of big homes could struggle to sell them to an indebted younger generation.

Tracey Watson, manager of subdivision developer Suburban Estates, said their cheaper homes sold fastest and the company was conscious of the need for affordable housing.

That was difficult as construction costs kept rising, she said.

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But features such as ensuite bathrooms, butler's pantries and two living areas were almost standard, Watson said.

People would sacrifice section size for a bigger home: "It reflects the way we live now, and what we expect."

- The Press


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