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Residential Update October 23

A few months ago in the August edition of Selection magazine, we commented that: “The green shoots of a recovery in Canterbury’s residential property market are increasingly sprouting up – with indications that the bottom of the price correction cycle is either here now, or about to be entered.”

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That observation has subsequently been supported by the ANZ in its latest Property Focus research report which notes: “The house price cycle has clearly turned, with prices marching upwards over the past few months.”

“Indicators of market tightness are still far from ‘hot’ (house sales are still weak relative to history) but things are certainly heating up. Indeed, all turnarounds must start from somewhere and there are plenty of green shoots to be found in the REINZ data.

“The ANZ’s outlook is for annual house price inflation to come in around five percent over 2024, then moderate to around three percent in 2025.” Other supporting data is reflecting similar sentiments. According to the latest REINZ statistics, the median house price nationally year-on-year for the month ending September has fallen 3.1 percent. Among the localised areas within Canterbury which saw their median price values fare far better than the national figure in the year to September are:

  • Christchurch City – down a mere 0.1 percent to $680,000
  • Selwyn District – down 2.2 percent to $801,000
  • Timaru District – flat at 0.0 percent at $510,000
  • Waimakariri District – down 0.4 percent $695,000
  • Waimate District down 2.9 percent to $340,000

Elsewhere in the province the median price for home sales in Ashburton was down 5.9 percent to $480,000, while conversely Hurunui District the median price for home sales was up a considerable 17 percent to $550,000.

Meanwhile, the latest REINZ stats for Canterbury spotlight that the current ‘median days to sell’ figure of 34 days is the same as the 10-year average for September. There is now approximately 14-weeks of residential property inventory in September 2023 for buyers to choose from – which is three weeks more than the same time last year. Analysing recent activity trends across the Greater Canterbury region, REINZ chief executive officer Jen Baird noted there were considerable variations and fluctuations between towns and districts within the province.

“There was a mix of active buyer groups across the region – with first home buyers being the most active in Christchurch, owner-occupiers in Ashburton, and investors in Timaru,” Ms Baird said.

“Price expectations remained the same for vendors in Christchurch, steady for vendors in Ashburton, and mixed in Timaru. Meanwhile, open home attendance continued to rise for most of the region – but agents say that attendance numbers in Ashburton was very property specific.

“Auction room attendance continued to rise in Timaru and Christchurch, but was low in Ashburton. “Overall market sentiment is leaning towards the positive side. While factors such as interest rates, inflation, and anticipation of the election have affected the market, local real estate agents are predicting an active market in the time leading up to Christmas and early next year.”

Reflecting the growing enthusiasm and activity being evidenced within the Canterbury residential property market, ANZ’s economists have revised their near-term house price forecast upwards and now see prices lifting around four percent, up from three percent previously, over the second half of this year. Underpinning recent momentum in Canterbury, first-home buyers appear to have upped their momentum in the market after a long hiatus. They, along with investors, tend to be the buyers that move the market near turning points.

Anecdotally, the residential sales teams at Bayleys Canterbury note that first-home buyers have been growing their deposits and may have been holding off buying in case house prices fell further.

In talking to scores of attendees at our open homes every weekend, the Bayleys residential property sales teams are hearing that the biggest constraint on first-home buyers entering the Canterbury residential property market has switched from deposit size, to servicing cost as house prices have fallen and mortgage rates have risen. The Bayleys Canterbury residential sales team is always available to share our market knowledge with both vendors and potential buyers, please get in touch if you’d like more information. Similarly, if any properties in this edition of Selection magazine take your interest, please give the listing agent a call – we’d love to hear from you.

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