The Star: January 20, 2022

The Star Thursday January 20 2022
12
NEWS
CHRISTCHURCH is New
Zealand’s hottest housing market
right now, with the city’s average
property value rising 35 per
cent – $200,000 – in the last 12
months to $758,000.
But experts think it is unlikely
Christchurch will hit the $1 million
mark this year.
Economist
Tony Alexander
said prices in
the city are
unlikely to grow
at the same
rampant pace.
“They’re
not going to
increase 35 per
cent again
this year.”
A 15 per cent rise would
take average values to around
$860,000, he said, “so you’re
probably looking at 2023 or 2024
before the average value hits
$1m.”
Alexander noted Christchurch
property values are still in catchup
mode, and as such there’s still
room for growth.
“That catch-up really got rolling
in winter last year and that
catch up is going to continue, especially
in light of a lot of people
not being able to get a mortgage
in order to be able to purchase
in Wellington and Auckland.
They are going to be looking at
Christchurch instead.
“While the CCCFA and LVR
changes etc will definitely slow
the housing market around New
Zealand, we’ll see some transfer
of buyers into Canterbury and
Christchurch.”
The catch-up, or outperformance
of Christchurch versus
the rest of the country on average,
will likely continue all this
year and probably most of next,
he said.
Of New Zealand’s seven major
metros, four – Auckland, Wellington,
Tauranga and Queenstown
– have an average property
Latest Canterbury news at starnews.co.nz
House prices unlikely to hit $1m this year
Tony
Alexander
HOT STREAK: Christchurch house prices rose 35 per cent in the last 12 months.
PHOTO: GETTY
value of more than $1m, according
to the latest OneRoof figures.
But house price growth in
Dunedin and Hamilton, which
have an average property value
of $750,000 and $922,000 respectively,
has been easing off in the
last three months, while growth
in Christchurch has stayed
strong.
Kelvin Davidson, chief
economist for property research
company Corelogic, agrees the
$1m milestone won’t be reached
this year, noting growth of 35 per
cent two years in a row would be
extremely unusual.
“I have to say I would find it
hard to believe
that Christchurch
would
meet $1m in
2022. Nothing
is impossible
but it’s simply
the maths,” he
Kelvin
Davidson
said.
Percentage
increases from
a higher level
equate to bigger dollar increases
which means more money to
find from first home buyers,
who still need a 20 per cent
deposit.
“In reality, people have to find
extra deposit and people trading
up have to find more finance at
a time when finance is getting
harder to get and when interest
rates are going up.”
Davidson does agree
that house price growth in
Christchurch is likely to be
higher than the national average.
If prices rise 5 per cent on
average nationally, then that
could translate to a 10 or 15 per
cent rise in Christchurch.
Harcourts Gold owner Chris
Kennedy, said Christchurch is
undervalued compared to the
rest of the country.
Kennedy predicts a different
market this year but still a strong
market.
“I’m not sure we’ll see big
lifts in value, we’ll see perhaps a
solidifying of value.”
His advice is not to sit on the
edge of the market waiting for a
fall.
“Once you’re in the market in
terms of owning property you
have a greater level of options.
“To sit out the side of it and say
it’s going to reduce, it’s going to
fall, it’s going to crash, it’s going
to collapse, I think is the wrong
decision or the wrong view to
take.”
—NZ Herald
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E: bishopselwyn@ultimatecare.co.nz
www.ultimatecare.co.nz
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bishopselwyn@ultimatecare.co.nz