Christchurch Market Update August 2021
As New Zealand rolls through the winter period, we would traditionally expect to see the real estate market slow and hunker down a little as people make the decision to just ride out the colder wetter months and stay indoors.
Typically, we could expect a percentage of the public to be away on holiday visiting warmer climes, and just not even thinking about real estate over winter. But as we all know, everything is different in our world this year and what might have been a normal winter period is now vastly different for all the well-publicised reasons.
Like the general population, everyone in the world of real estate is captive in the country and still working away. As a consequence, we are seeing little in the way of activity drop-off across the industry. At the same time, we are seeing the real estate environment played out daily in the media, and anyone who is anyone commenting about what is happening.
The commentary, predictions and bias of the commentator may be right or wrong, but the burning question is…do they actually know the cold hard facts?
The release of data relating to sales made across the country in July once again provides us with those facts, and for members of the public desperate to secure a home for their families by buying or renting property, those facts make for hard reading. Once again, the headlines are telling us that New Zealand has reached a new record median house price level, and this is borne out in our local market with a new record median for Christchurch of $600,000.
The headlines go on to offer some tentative hope that perhaps the rate of property price growth is slowing. However, any slow-down in the rate of growth just means that the ever-upward spiral is not as fast as it was previously, and it is not the case that it has stopped or even retracted.
When you read deeper into the released REINZ data, the information tells us that the inventory levels across New Zealand are down 34% on a year ago and that here in Canterbury we are faring even worse, recording shockingly low inventory levels that place us amongst the lowest levels in the country. We are down almost 47% in comparison to this time last year.
I am sure that if you are reading this you will appreciate the long-term maxim that supply and demand are inexorably linked with price, so you will appreciate that while supply is constrained, and demand is still strong the inevitable price rises will continue. This is demonstrated best by the continual upward movement of the Christchurch House Price Index (HPI) – another indicator designed to ‘predict the future trend’ of what is expected to happen in our local market.
The actual monthly data tells us that along with the new median value of $600,000, we had 658 recorded sales across the city (similar to last July) and the ‘days on market’ slipped further to a new low of 27 days. What that is telling us essentially is what we already know: that property is selling so quickly it just doesn’t stay on the market for long.
The interesting point here is that because Harcourts is so dominant with auctions in Christchurch (and we try to market property and make it available to the whole market, not just the first person who comes along), I think we are the main company holding the tide back from the ‘days on market’ getting smaller.
As either a seller or buyer, a quicker turnover of property is the last thing you want to see now. From a buyers’ perspective, if property is sold too quickly or to the first enquirer, you will simply not have a chance at all to buy unless you know every real estate licensee in Christchurch. Similarly, from a seller’s perspective, if you are selling quickly to the first person who sees your property, how do you know you have sold for the best possible price?
In the current climate I believe licensee advertising claiming that they will sell your property ‘off market’ or any of the other variations of the same theme are potentially doing you as a vendor or client a disservice. While this might be appropriate in certain special circumstances, generally at the moment I believe you will be selling yourself short.
The REINZ data tells us that the whole industry median selling price in July was $600,000 and that the average selling price for the same period was $721,996. What we can tell you is that over the month of July, Harcourts Christchurch median sale price was $689,500 and our average sale price was $822,056.
Taking into account all the data and appreciating that Harcourts sell approximately half of all the homes sold in Christchurch on any given month, our systems, processes and size work well for the benefit of all parties to a real estate transaction. But there is no doubt in my mind that if you are a seller and you want the best possible outcome from your sale, then you need to talk to your local Harcourts office.
Obtaining the best possible outcome will be worth a lot more to you than choosing an agent based on the lowest fee structure, or the fact they will sell ‘off market’.