Potential for 20,000 homes

03:13, Jun 24 2011

A massive shift of residents and money from earthquake-damaged neighbourhoods will cause unprecedented upheaval in Christchurch.

Real estate agents are warning of shortages of vacant sections driving up prices, while a business leader says about 100 small businesses will be trapped in disappearing suburbs.

The valuation and advisory director of real estate firm Colliers International, Gary Sellars, is warning of a shortfall of vacant sections if thousands of householders take up the Government's offer to buy quake-damaged Christchurch properties.

However, Christchurch Mayor Bob Parker says there will soon be up to 20,000 available sections or properties where people with quake-ruined homes can move to.

Parker said the information he had been provided by council staff was different from Sellars' figures.

"My staff tell me at the present time in the Christchurch market, if you take both the new subdivisions and a number of existing sections tucked into existing communities, that there's probably around 10,000 in that category."

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He said the existing sections were "sprinkled throughout the city", and the 10,000 sites were available now.

Parker said 5000 to 6000 subdivision sections had been consented to and would be available in the next few months, and the council would be working hard to open up another 4000 to 6000 subdivision sections in the eastern suburbs.

He believed many of the homeowners who had to abandon their houses would stay in Christchurch.

"I think the majority of people will want to stay in Christchurch, but some will want to leave and that's easy to understand."

Sellars told Radio New Zealand the law of supply and demand suggested that property prices could be pushed up in the region, but Parker doubted that would be the case.

"The market will actually move to deliver outcomes that work for people," he said.

"There's a huge opportunity here and there will be some competition as different elements in the market move to capture that."

WINNERS AND LOSERS

The Government's deal will tip about half a billion dollars and thousands of buyers into the property market - a surge likely to throw off the supply-and-demand balance that governs house and land prices, and rents.

Undamaged homes and new subdivisions are expected to become hot commodities.

Established locations could lose their appeal if services such as shops and schools disappear along with populations, while others may gain an exclusive name or find new riverside parks or recreation facilities on their doorstep.

Traffic and amenities, which traditionally affect value, will shift.

"There are really going to be winners and losers," property valuer Bevan Fleming said. "Some areas could become really special and the changes could be positive, but there are so many question marks."

Fleming said that even if many people left the city, there would still be huge demand.

"If 90 per cent stay in the market, that's a lot of buyers, and how quickly will they get their money? There will be a lot of tenants looking for places, too."

Fleming wondered whether residents choosing to stay in written-off areas would be able to recoup lost value later, and how easily would they get insurance.

He said that as rating valuations were a broad calculation that may not reflect market value, affected property owners must be free to challenge their valuations or seek an independent view.

Real Estate Institute Canterbury director David Rankin said the news would give the real estate market a major boost after "months of lean pickings".

He hoped the payouts would be staggered so as not to create undue pressure and "cause the market to move greatly".

He expected plenty of demand for homes but more for sections as owners of older houses would do better taking the Government's land offer and having their insurer fund rebuilding elsewhere.

People with newer homes might be better taking the full Government payout, he said.

"Some people are going to finish off better than they were," he said.

Rankin said properties in the orange zone, where decisions on land had yet to be made, could lose value if sold before their fate was known.

The average house price in Christchurch's northeastern suburbs, including Avonside, Avondale, Burwood and Parklands, is about $325,000, Real Estate Institute figures show.

Sections are available from about $150,000 in subdivisions in and around Christchurch, and less in towns in the city's commuter belt.

BUSINESSES HARD-HIT

Canterbury Employers' Chamber of Commerce chief executive Peter Townsend said business owners in newly red zoned areas felt "like their hope is gone".

He called on employers to be accommodating and flexible during a tough time for those whose properties had been condemned.

He said there had been a marked shift in workplace dynamics after the June 13 aftershocks, with many more employees suffering stress-related conditions.

CITY BOUNDARIES TO MOVE

Meanwhile, Environment Canterbury (ECan) and local councils have reconsidered a restriction on urban limits to make room for thousands of new Christchurch homes.

Yesterday, ECan confirmed it had asked the Environment Court to approve moving out the boundary set in 2009 to limit new housing development sites.

The shift would clear the way for Prestons, a planned suburb with 2700 sections in Marshland, as well as other areas on the outskirts of Christchurch and surrounding towns.

ECan commissioner Peter Skelton said the councils supported the shift because of the "extraordinary circumstances" after the quakes.

The proposal to alter the limits, set out in the Greater Christchurch Urban Development Strategy, will be heard at a special Environment Court hearing in Queenstown.

Any developments within a new limit would still be subject to scrutiny by the Christchurch, Selwyn and Waimakariri councils.

The Press