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Residential Update December 23

As the weather improves ahead of Christmas, we are seeing improvements in overall house price recovery. We first spotted the first signs of improving fortunes as far back as August, however that rate of improvement stalled in the lead-up to the general election, and then concertinaed with the vote recount and subsequent period taken to establish a coalition government.

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Nationally, after six months of gentle gains, house prices nationally are still about 2.1 percent above the low they reached back in the first quarter of the year. ASB’s most recent economic and property report notes: “Over the short to medium-term, we (ASB economists) still view the housing market fundamentals as supportive for further price growth.”

While Canterbury’s residential property market cooled a little in October and November, this was in fact the first monthly reduction in house sale price increases we have tracked since April, when we first started to see the 2021-2023 house price easing cycle draw to a close. Sales volumes also eased back during the October/November period.

According to the latest REINZ (Real Estate Institute of New Zealand) statistics (for October 2023), median house prices have grown year-on-year across multiple districts within the Canterbury province for the month ending October 2023.

Among the localised areas within Canterbury which saw their median price values increase in the year to October are:

  • Christchurch City – up 4.5 percent to $680,000
  • Hurunui District – up 5.5 percent to $712,000
  • Selwyn District – up 3.2 percent to $831,000
  • Timaru District – up 1.0 percent at $495,000

Two areas showed decreases year on year driven by much a lower level of houses for sale:

  • Ashburton – down 4.1 percent to $465,000
  • Waimakiriri District - down 3.6 percent to $715,000

Meanwhile, the latest REINZ stats for Canterbury spotlight that the current ‘median days to sell’ figure of 33 days is only one day greater than the 10-year average for October. There is now approximately 14-weeks of residential property inventory in October 2023 for buyers to choose from – which is five weeks less than the same time last year.

Analysing recent activity trends across the Greater Canterbury region, REINZ chief executive officer Jen Baird noted that like the previous month, there was a mix of active buyer groups in the region – with owner-occupiers being the most active across the region and first home buyers showing activity in Timaru and Christchurch.

“There was a mix of vendor expectations – with some meeting the market, while others held on for better opportunities. Open homes and auction rooms saw some good attendance in Timaru and Christchurch. Sales counts were stable in Timaru and Ashburton,” Ms Baird said.

“Agents observed that the market sentiment was positive across the region. Ashburton agents reported low yet steady activity, and in Christchurch, buyers showed more engagement.

“Factors such as interest rates, the economy, election results and international events have impacted the market. Some agents are expecting a strong start later in 2024.”

Anecdotally, the residential sales teams at Bayleys Canterbury are hearing feedback from the attendees at open homes that as of now, the primary constraint on prices and activity surging further ahead in Canterbury is the comparatively high level that mortgage rates have reached – putting debt serviceability under pressure.

While recent data suggests the prospect of further OCR increases is decreasing, economists still expect the Reserve Bank of New Zealand to leave settings at a more restrictive level for a prolonged period – hence the comparatively slow recovery being anticipated during this current property cycle.

In our opinion, nothing beats a face-to-face chat to talk through these market dynamics, and from that perspective, the Bayleys Canterbury residential sales team is always available to share our market knowledge with both vendors and potential buyers.

For now though, the team at Bayleys Canterbury Residential wish all everyone a Merry Christmas and a relaxing and enjoyable New Year holiday break with friends and loved ones

We look forward to catching up with you in 2024.

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