Christchurch takes out 'unwanted' 2021 property title

JOSEPH JOHNSON/STUFF
Aucklander Royden Burt's transfer to Christchurch allowed him to buy his first home and he's far from alone in making the move.

There were staggering house prices rises nationwide last year, but Christchurch had the biggest with its average price up by 40.2 per cent over 2021, new Quotable Value figures show.

The cost of the average Christchurch house climbed from $560,000 in January last year to $785,000 in December. That means, on average, homeowners in the city saw their equity increase by $220,000 over the year.

Quotable Value (QV) operations manager Paul McCorry said this made the city the obvious winner of the “unwanted” biggest price increase title in 2021.

“It is a symptom of a market a little earlier in the growth cycle, where relatively speaking things are a little more affordable.”

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While the rate of increases had in Christchurch had declined slightly recently, it was still in the double digits at 11.6 per cent over the last three months, he said.

Nationwide, prices rose 7.8 per cent over the three months ending December to an average of $1,053,315, up 28.4 per cent from the same time a year earlier, the QV figures showed.

All the urban areas monitored by QV recorded an increase in average prices. In Auckland, the country’s biggest market, prices were up 9.7 per cent over the last quarter to a regional average of $1,527,092.

House prices in Christchurch were up by 40.2 per cent in the year to December, according to QV figures.
ALDEN WILLIAMS/Stuff
House prices in Christchurch were up by 40.2 per cent in the year to December, according to QV figures.

Whangarei, New Plymouth and Hastings also had strong quarterly increases, with 8.6, 8.4 and 8.1 per cent to $827,836, $747,745 and $922,287 respectively.

In the Wellington region, prices rose 3.2 per cent to an average of $1,086,421.

On an annual basis, prices in Auckland, Tauranga, Hamilton and Wellington were up more than 25 per cent, at 29.1, 30.5, 29.1, and 25.5 per cent respectively.

But McCorry said it was becoming clear the level of price increases would not continue indefinitely as there had been a decline in the quarterly rate of growth.

In November three quarters of the areas monitored recorded increases in the quarterly growth rates, but in December half showed a decline, he said.

“They are all still seeing values go up, but at a much slower pace. Of the half that are still showing an increase in the rate of growth, five increased by less than 1 per cent.

“The market has pumped the brakes, but it hasn’t ground to a halt completely. And, after over 100 days in lockdown it is no surprise to see Auckland catching the wave of a now internationally recognised trend – a post-lockdown market boost.”

McCorry said while mortgage rates were rising, they were still low by historic standards, and this had probably prevented the market being stuck in the mud.

“But any more increases could start to make both banks and their borrowers feel nervous. More rigorous lending criteria that came into effect in December will have banks really scrutinising every application.”

At the end of last year, Auckland was in the midst of a post-lockdown market boost.
Abigail Dougherty/Stuff
At the end of last year, Auckland was in the midst of a post-lockdown market boost.

Market dynamics were also changing, with a flood of listings on to the market in recent months, which meant more choice for buyers, he said.

“They won’t attend every open home, and you won’t get as many multi-offer situations. The chatter about properties being handed in at auction is real, as is property sitting on the market beyond the initial tender period and often re-listed with an asking price.”

He expected prices to increase in the smaller single digits towards the middle of this year, but realistic pricing would prevail and agents would need to manage vendor expectations carefully.

QV consultants around the country suggested a similar outlook for their respective markets, including the currently hot Christchurch.

Canterbury QV consultant Olivia Brownie said prices were likely to continue rising over the summer months because of the relative affordability of the region.

But there were early signs the increases would slow and perhaps flatten as the year continued, with tighter lending rules and rising interest rates starting to have an effect, she said.

“An increase in listings and a pipeline of new-build supply and redevelopment continuing in 2022 will also likely slow that market growth somewhat.”

While the latest figures from Realestate.co.nz and CoreLogic also showed prices were up in December, there was a consensus among experts that the tide had turned for the market.