Christchurch homes 'severely unaffordable'

LIZ MCDONALD
Last updated 07:30 21/01/2014

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House prices in Christchurch have reached a new high, while a study has rated the city's homes severely unaffordable.

Homes selling in the city last month fetched a median price of $420,000, up from $379,000 a year earlier, according to the Real Estate Institute.

This is an annual rise of 10.8 per cent. The price was the fourth record for the year.

Across Canterbury and Westland, the median price was $395,000 - up 12.5 per cent.

The annual Demographia International Housing Affordability report co-authored by Christchurch land-use campaigner Hugh Pavletich said the city's homes were less affordable than those in Brisbane, Edinburgh, Singapore and Montreal.

Pavletich, a former property developer who lobbies the Government to free up land for housing, compared house prices against incomes in 360 mostly English- speaking cities and found New Zealand and Australian homes were among the dearest.

"Household incomes have stagnated or are even declining in real terms," the report said of the high income world. "The cost of housing could become an even greater burden for households when artificially low mortgage interest rates rise to historic norms."

There was "hope" as the Government had recognised the problem and was pursuing strategies to try to cut housing costs, the report said.

The Real Estate Institute figures showed 819 homes sold in Canterbury-Westland last month, of which 526 were in Christchurch. Sales in the region took a median of 27 days.

Institute director Tony McPherson said the new restrictions on low-deposit loans appeared to be having an effect, "with first home buyers continuing to sit on the sidelines".

Investors were actively buying, particularly with "as is, where is" properties, he said.

McPherson said the number of real estate listings was rising slowly, perhaps as damaged homes were repaired and ready for sale.

SOUTH ISLAND MEDIAN PRICES

North Canterbury $410,000

Mid-Canterbury $307,500

Timaru $275,250

South Canterbury $244,000

West Coast $212,500

Nelson District $399,500

Marlborough $327,500

Queenstown $513,000

Dunedin $294,500

Invercargill $199,000

The national median price for December was $427,000, also a record.

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- The Press

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