Lack of houses sends prices to record high

LIZ MCDONALD
Last updated 05:00 11/09/2012

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House prices have hit a record high in Christchurch after surging almost 10 per cent in the past year.

Strong demand, a lack of listings and a shortage of houses are combining to create a sellers' market and push up prices. The Real Estate Institute said the city's median (midpoint) house price last month was $371,600.

The institute's price index, which tracks the city's prices by comparing sales of similar-priced properties, has jumped 9.3 per cent in the last year.

Institute director Tony McPherson said the city's housing market had seen a year of rapid sales growth.

Prices were continuing to rise partly because of the "persistent shortage" of homes on the market in Christchurch and in towns such as Rangiora, McPherson said. Homes in the region were selling quickly, in a median of 33 days.

Valuer Bevan Fleming, of Valuation Solutions, said the market for houses was "very strong" and he did not see house inflation slowing until more houses were available.

"The shortage is everywhere, right across the board. It's not just in the northwest - even in the eastern suburbs the prices are going up because people still want to live there.

"Anything that's not damaged is attracting really good money, and properties that have been repaired, as long as people don't have to worry about getting things fixed."

In addition to the loss of homes through red-zoning, the delays in repairing the about 30,000 houses on TC3 land was "strangling supply", Fleming said.

Research from real estate network First National revealed that despite strong demand nationwide, the lack of listings was putting owners off selling for fear of being unable to find a replacement home.

Real estate agent Lynette McFadden, co-owner of Harcourts Gold, was seeing "a lot of activity from red-zoners trying to secure a home promptly".

Agents were also noticing new interest in Port Hills homes from buyers who had lost their own hill homes, but did not wish to move to the flat, she said.

Investors and first-home buyers were also in the market. Open homes were busy.

Economist Robin Clements said that with perhaps twice as many people house-hunting and half as many homes for sale as last year, the price rises were no surprise.

Rents in the region are also up strongly, according to figures from the Business, Innovation and Employment Ministry. The median rent for a three-bedroom house rose by 10 per cent in the past year in St Albans, Fendalton-Merivale and Linwood-Bromley, and by 14 per cent in Kaiapoi-Rangiora.

The median section price in Canterbury and Westland last month was $178,500.

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Fleming said the many subdivisions in and around the city would keep section prices from rising.

The median house price was $345,000 across the Canterbury-Westland region, $323,000 in Kaiapoi, $320,000 in Rangiora, $271,000 in Mid-Canterbury, $246,000 in Timaru district, $260,000 on the West Coast, and $330,000 in Nelson-Marlborough.

- The Press

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