House sales are at their highest level in Canterbury for more than three years and values are setting records as red-zoners, first-home buyers and investors compete for properties.

Low interest rates and rising rents are attracting first-home buyers into the market, while owners getting payouts from the red zone are creating high demand for houses.

Real Estate Institute figures show more than 1000 homes sold in the region last month, the most since March 2009 and back at the levels seen during the last housing boom.

Quotable Value says the average value of a house in Christchurch is now $379,500, about 1 per cent above the previous market peak of 2007, while values in surrounding districts are well above previous record levels.

Values in the past year have risen by 5.1 per cent in the eastern suburbs, 3.9 per cent in the central city and northern suburbs, 8.1 per cent in the south and west, and 3.7 per cent in the hill suburbs.

Waimakariri District values are up 14.1 per cent on a year ago, the most anywhere in the country, while Selwyn values are up 9.3 per cent.

Harcourts real estate owner Lynette McFadden said there was "aggressive" demand for good properties, but buyers wanted property reports, inspections and insurance details before signing contracts.

"Just about all the properties we've taken to auction have sold, and we're getting multi offers every day," she said.

"Even properties that have been sitting around for a long time are selling; there's such strong interest. People are looking for instant solutions."

McFadden said many landlords were buying, and in some cases competing with homeowners.

Another trend was red-zoners unable to find what they wanted on the west side of town "and they've taken their money back to the east".

QV valuer Richard Kolff said there was a shortage of smaller home and land packages for sale in subdivisions, partly because covenants demanded minimum floor sizes.

"Those wanting a modestly sized, easily maintained property, but not wanting to move into an over-60s unit or a retirement village, are finding it hard to come by alternatives."

Lifestyle properties had been in demand as city people reassessed their lives after the quakes, he said.

Westpac chief economist Dominick Stephens said Christchurch City was taking over from the surrounding regions as the main driver of growth in Canterbury's housing market.

He described sales in the city as strong, and this was spilling over into neighbouring districts.

Average rents are also up in all parts of the city, with annual rises of between 5 and 13 per cent, depending on the suburb.

The Department of Building and Housing says the average weekly rent for a three-bedroom home has risen in the past year by 10 per cent to $330 in Linwood, 9 per cent to $372 in Halswell, 5.5 per cent to $350 in Cashmere, 11 per cent to $455 in Fendalton, 13 per cent to $380 in Riccarton, and 7 per cent to $350 in New Brighton-Burwood.

- © Fairfax NZ News

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