Property for Sale in Christchurch

A Look at the Market

On February 22, 2011, a 6.3 magnitude earthquake hit the town of Christchurch, New Zealand, destroying much of the city centre and resulting in flooding of the eastern suburbs.  Damage caused by the earthquake has resulted in major shifts in the property market in Christchurch, leaving many investors, owners, first-time homebuyers, renters and landlords puzzled regarding the value of properties and the future of the city.

The State of the Market

Following the earthquake, the real estate market was marked by reactionary decisions in which real estate in some suburbs was favoured due to perception of safety rather than any evidence.  For instance, Rolleston properties were bought up rapidly after February 22, even though it was near the epicentre of the September 4 quake.

To make some sense of what is occurring in the Christchurch real estate market, it is important to look at general trends as well as consider the future of the area.

Supply and Demand

One of the by-products of the earthquake was the large number of people displaced when their homes were made unliveable.  However, the number of residents choosing to leave the city has opened up a number of liveable properties.

Depending on the suburb, the supply and demand for properties in Christchurch differs.  However, for the most part, demand is outpacing supply for both properties for sale and rent.  This is causing house prices in some neighbourhoods to rise, though not substantially.

Renting

Immediately after the earthquake, both supply and demand for rental properties was high.  However, over time is has developed that demand is high and supply low in the western, undamaged areas, which the opposite holds true for neighbourhoods that saw damage.  Often, landowners in the eastern suburbs are lowering rent in order to find tenants.

Owning

The value of homes in the area has dropped slightly, though some properties were still selling above valuation.  Typically though, homes in the undamaged neighbourhoods are selling for their value before the earthquake.  Depending on the exact location of a property, the current state of the market could be beneficial to sellers.

In fact, before Christchurch’s first major earthquake, in September 2010, house prices were declining.  This trend reversed only after the earthquake, which resulted in a 3% increase in Christchurch home values overall.  Since February, home values have levelled out.

The future of the market

As of yet (July 2011), no decision has been made as to how or where the city centre will be rebuilt.  Due to this uncertainty, it is impossible to say which suburbs will show the highest returns on investment.  Western suburbs appear to be a safe choice, though as any Cantabrian knows, the future is unpredictable.

Overall, the real estate market in Christchurch appears to be stable.  As New Zealand’s second largest city, the South Island’s economic hub and a major tourism destination, the town is unlikely to stagnate.  Especially once the rebuild efforts begin in earnest, the influx of money and related jobs will likely add some dynamism to the market.

Whitney Cox is a blogger based in Christchurch, New Zealand.  She has kept an eye on property for sale in Christchurch ever since the earthquake and is looking forward to seeing what the future holds.