Christchurch houses sell faster and prices rise

17:00, Sep 14 2009

Christchurch house prices have risen again and homes are selling faster as buyers compete for cheaper properties.

Market observers say demand is still mainly from investors and first-home buyers, with low interest rates making mortgages more affordable, but say the price rises may not last.

Real Estate Institute figures put the city's median price for last month at $316,500, up from $310,000 in July. The median for August last year was also $310,000.

The Canterbury-Westland median price was $295,000, down from $297,000 in July and up from $290,000 in August last year.

There were 600 sales in Christchurch and 885 in Canterbury last month, fewer than in July but more than a year ago.

Institute president Mike Elford said the lack of homes for sale was restricting sale numbers but propping up prices.

Advertisement

With homes now selling nearly twice as fast as a year ago, he said, "the issue is not that houses are hard to sell, but rather that there is a shortage of stock going on the market".

"Where properties are coming on the market, we're seeing multiple offers, which is good for sellers," Elford said.

Christchurch couple Michelle and Julian Verkaaik were amazed to have more than 70 groups of buyers through their home in its first weekend on the market.

They put their three-bedroomed Somerfield home up for sale in mid-August and had four offers within a week.

"It's all done and dusted already; the sale has been settled," Michelle Verkaaik said. Christchurch valuer Bevan Fleming, of Valuation Solutions, said valuers had become busier as the cost of borrowing had fallen.

A two-tier market had emerged, he said.

Properties under $300,000 were in demand from first-home buyers and investors, but sales of mid-priced and dearer homes were "quite sluggish".

"It's all about vendor motivation," he said. "Some people have to sell, but those who don't have to will hold out."

ASB Bank chief economist Nick Tuffley said the market had swung from "an extreme buyer's market" to something more balanced.

"If anything, we'd say the market is being pressured because there aren't as many listings now," he said.

Tuffley expected modest price rises in the short term, but prices would settle down as more properties came up for sale.

State valuer Quotable Value said last week house prices had risen for the fifth month in a row and were just 2.8 per cent lower than a year ago.

The country's biggest real estate group, Harcourts, said its August sales were up 47 per cent nationally and 55 per cent in Christchurch compared with August last year.

Harcourts chief executive Bryan Thomson said while the shortage of listings had pushed up prices in many centres, it was "too soon to be talking about another housing market boom".

The Real Estate Institute's figures showed the median time between listing a home and selling it was now 30 days in Canterbury-Westland, down from 55 days a year ago.

The median August house price nationwide was $346,750, up from $330,000 a year ago.

The Press