Christchurch homes among least affordable
The loss of thousands of quake-damaged homes is a "massive factor" in the rise of Christchurch house prices, experts say.
The city's houses are among the least affordable in the world, an international survey issued yesterday shows.
The annual Demographia housing affordability survey, which covers cities in seven countries, found that the average Christchurch home cost 6.6 times the average annual household income in the city.
That meant Christchurch was 312th out of 337 cities surveyed and the second-least affordable city in the country behind Auckland (6.7 times).
Christchurch valuer Bevan Fleming said quake damage to the city's housing stock had reduced the number of homes for sale, increasing demand for the remaining properties.
"You've got 7000 houses in the red zone and many more that can't be sold at the moment, so there's just not many houses for people to buy."
He said the quakes had also disproportionately affected lower-value homes in parts of the city.
"It's a massive factor, particularly in the under-$350,000 bracket. So many houses on that side of town are no longer available," he aid.
Real Estate Institute Canterbury director Tony McPherson said Christchurch had a historically low rate of construction before the quakes, which had exacerbated the quake-related damage.
"When you couple the two issues, that puts pressure on supply, which does have an effect on price."
He did not believe the situation would change, with planned subdivisions and new housing likely to "at best steady" the affordability of homes.
Christchurch economist Robin Clements said a predicted post-earthquake boom was unlikely to resolve the problem, with higher wages for skilled labourers offset by higher building costs.
"You're sort of chasing your tail really.
"People will have more money, but it will cost you more to buy a house."
He said politicians needed to tackle problems such as land supply, construction costs and compliance fees if they wanted to help housing affordability.