New Zealand's hottest housing market is finally slowing down
Christchurch, New Zealand’s hottest housing market in 2022, is finally starting to feel the pinch from the country’s property downturn, as the city experiences a slowdown in property sales as well as an increase in the number available.
Christchurch currently has more properties for sale than in the last three years, and they are taking longer to sell, too. Those numbers are expected to rise with people wanting to list their properties now or early in the New Year.
Despite it being a buyers’ market with plenty of options for potential home buyers, agents said prices have only slipped by 5% in Christchurch, compared to the much bigger declines in other major metros, OneRoof reported.
Rachel Dovey, Bayleys Christchurch general manager of sales, said the number of properties for sale has more than doubled from about 800 last year to 2,200.
“What happens when you double the stock and you’ve got the same buyer pool or less buyer pool – it just becomes slower and more challenging, and that’s probably what we are facing,” Dovey said.
She said the slowdown already experienced in major cities such as Auckland and Wellington has started to trickle down to Christchurch, although the decline has been nowhere as severe.
“Because our median sales price is that much lower than Auckland, we are just not seeing the big, dramatic drops,” Dovey said. “And while we went up 20 to 30% and I guess they did too, theirs has come back 15% to 20% and we haven’t seen that dramatic drop.”
Dovey said although the decline in prices hasn’t appeared in the statistics yet, it was already being felt on the ground and was estimated to be around 5%, OneRoof reported.
Dovey said the pricier houses appeared to still be selling well, while the mid-range family homes priced between $700,000 and $800,000 were more impacted.
“Those price points in the middle where you’ve got kids, you’ve got more expenses and it’s just the pressure in that price bracket,” she said.
Adam Heazlewood, Bayleys salesperson, said people were putting their houses on the market now or were planning to at the start of 2023, despite Christmas looming close.
And despite the softening of the Christchurch market, Heazlewood said it was nowhere near as dramatic compared to what appears to be happening in some other parts of the country.
“It’s having the same trends of slowing and the average days on market growing, but it’s still considerably better than what I’m hearing in the likes of Auckland,” Heazlewood said. “There’s a good amount of choice. There’s still emotional buying happening, but buyers are definitely on average more calculated than they were and that’s obviously because of the current environment we are seeing with the OCR changes and the rest.”
Andy Freeman, Harcourts Grenadier managing director, said fewer properties were selling, but this hadn’t impacted sales prices much, OneRoof reported.
“Everything has just slowed down – there's no rush anymore so people are just taking their time,” Freeman said. “But I don’t believe the values have dropped a hell of a lot – they are saying 5% and that could be correct.”
Richard Withy, Ray White Metro sales and auction manager, said the “crazy boom time” was a thing of the past, but some buyers were still looking as Christchurch returned to a more normal market.
“We are still getting good numbers to open homes,” Withy said. “They are a bit patchy from area to area, property to property. I think that’s a combination of what's happened around the rest of the country in terms of the main centres and how they’ve come off that boom market.”
He said areas such as Somerfield, Beckenham, St Martins, Cashmere, and Mount Pleasant were performing better than others, and properties that were well-marketed, well-presented, and well-represented were still selling well.
Properties that were proving a bit harder to sell, meanwhile, were two-bedroom townhouses and houses in some of the newer subdivisions, such as those in Rolleston, where there was a lot of stock.
And while the higher levels of stock across the board does put pressure on prices, Withy believes the price falls will not be as steep as those in Auckland or Wellington.
“As there’s more stock, there’s more pressure on price because you’ve got more competition,” he said. “So, yes, there’s more pressure than there’s ever been before on price and sellers really have to do everything perfectly from the start to get (the) result they hope for, and buyers have more choice, which if the price is not right, they will move onto the next one until the price is right.”
There is no Christmas slowdown in sight just yet, however, with agencies now bracing to call several houses at auction in the next few weeks. They said there’s usually a “bit of a burst” before it starts to quiet down in the second week of December as people get into holiday mode, OneRoof reported.
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