Monthly Market Update - May 2018
Traditionally as we head into winter we expect the headlines and market comments to be all about a market hunkering down during the colder months, but this year it’s different.
For several months now, I have been talking about Christchurch’s strong steady market, its not rampant, but it has been consistent, and the latest REINZ figures for the month of May show this strong steady trend is continuing but potentially with underlying pressure. The recently released results for May tell us there were 657 residential sales in Christchurch city, the median price was $457,500 and the average days on the market 35 days.
Compared to the previous month this represents an increase of 120 properties sold or 22 % volume lift over the previous month, as well as had a slight 2.5 % increase in the median saleprice. The movement in the median sale price is not significant in my opinion as the median has hovered in and around this level for close to a year now, hence the steady property values. The lift in sales volume is however a strong indicator of the interest still being shown in our market currently, even during winter.
When we look at the data nationally we see that this market strength is being felt across the whole country, with the national median sale price up to a record high and total sales volumes across the country during May also up slightly on the same time last year. The national increases are not solely because of another boom in Auckland, their market had lifts in volume just like Christchurch, but their property values have remained relatively steady. This time the lifts in values have occurred in a lot of the regions. Overall though the strong sales volumes are the reason the real estate market once again features prominently in the national headlines and psyche.
Getting back to Christchurch, I expect to see the slight lift in the median price continue over the coming months. I expect this result simply because there is a real shortage of listed property across our city and nationally. Just look at the Harcourts pages in the press each weekend and our current Bluebook, advertised volumes of listed property is down.
With newly listed stock levels slowing, interest and sales volumes remaining strong then it is highly unlikely we will see property prices drop away in the short term. Having said that, I am not expecting rapid price growth either, we seem to have a very educated buying public currently, who by in large recognise that the market is steady and are not prepared to go silly price wise; consequently, we are not seeing much in the way of price movement.
Talking with our sales consultants across the city there is no doubt the current buyers in the market are mixed and diverse. There is a strong growing number of first home buyers in the market presently, a combination of steady property values, greater availability of funds, and greater flexibility for the banks to loan.
Noticeably another segment active in Christchurch now are the out of town buyers looking from other parts of the country, indications are that we are seeing good interest from this segment of the population currently for some reason, over and above the regular Christchurch buyer and seller. The opportunities and the changes now going on in our beautiful city are obviously encouraging a lot of people to relook at us. Imagine what it will be like when the Square and the Cathedral are finally sorted, let alone a Stadium, Convention Centre etc etc.
What does all this mean at the moment? Basically, it may be winter, it may be cold, but with property listings slowing, strong interest, good sales volumes, and values holding, its not a bad time to sell. Forget what you have heard, forget what others tell you, let the statistics talk for themselves. If you have a reason to look at selling in the near future, then now could be a great time. Buyers have limited fresh property coming to the market for them to consider, so when new stock is listed it will inevitably attract good interest, current sales volumes attest to this.
Now is a great time to stand out from the crowd because I have no doubt we will see a surge of property in the spring months when everyone decides to move. Have a chat to your local Harcourts Consultant - what harm can it do? One thing is for sure - there is great interest in Christchurch now.
Jim Davis - Christchurch/South Island Regional Manager