By Bernard Hickey
Real estate agency group Harcourts, which handles more than half of all property sales in Canterbury, reported that written sales were down 40% in March from a year ago and average prices were down 10%.
But Harcourts said activity had been much more resilient than expected and Cantabrians were getting on with their lives and adjusting to the 'new normal' after the devastating February 22 earthquake.
"The Canterbury market has been awash with commentators predicting what will happen to the real estate market since the February 22nd earthquake. Following the first full month since the earthquake we thought that facts should be shared to reflect the reality as rumor can be misleading," Harcourts said in a statement.
"Following the initial reports of masses leaving the area in search of futures elsewhere we are seeing evidence of people sorting out their living, working and schooling situations to reflect a feeling of “post earthquake normality”," Harcourts said.
"We are not suggesting that things are “pre earthquake normal” people are just adjusting to the 'new normal'."
Harcourts reported that it handled written sales in March of 340, down 40% from March 2010. Settled sales in March were 228, down 51% from a year ago.
The average price of NZ$350,000 in March was down 10% or NZ$39,000 from a year earlier.
The figures from Harcourts for Canterbury contrast with those released earlier on Wednesday from Barfoot and Thompson for the Auckland region, which showed sales volumes up 15.4% in March from a year ago, while the average price was up 6.6% from a year ago. See our earlier article here.
"As part of this process we have seen a real estate market that has defied even the the most optimistic of market commentators and in spite of difficulties faced around insurance and finance, transactions have been happening. Both written and settled sales have been positive," Harcourts said.
It reported new listings in March of 407, down from 936 in March a year ago, while new auction and tender listings fell to 40 from 113.
"The figures above do give a snapshot of the Christchurch marketplace with some positive signs emerging. In spite of the day to day difficulties Cantabrians are facing, they are a resilient and proud group of people that are going to rebuild a life and a city that only a month ago looked very difficult to imagine," Harcourts said.
'Price premiums'
Roger Dawson and Phil McGoldrick, two of Harcourts Auctioneers in the region, said they had seen strong activity with buyer demand for undamaged homes outweighing supply.
They sold 28 properties at auction in March out of a total offered of 54. Many others were sold in negotiations after auctions.
"These results even surpass the pre-earthquake auction success rates," they said.
The interest in open homes has also been strong, Harcourts said.
“From what I have seen even with the wet weather over the weekend there were people out looking at the open homes and in virtually all cases they are genuine buyers, who are looking to get themselves sorted," Harcourts Canterbury Business Development Manager Jim Davis said.
Harcourts said concern was growing about the level of new property coming on to the market.
"It may not be sufficient to meet the current levels of demand and thus prices may continue to have upward pressure due to competition between prospective purchasers. Results and prices achieved in some auctions have indicated that in some areas premiums are being obtained."
5 Comments
I wouldn't trust any statement put out by Harcourts. A close friend of mine in ChCh put his property on the market in October 2010 with Harcourts. It is in a nice suburb, Avonhead, that has had no damage whatsoever in both earthquakes. He was told by the Harcourts Agent in October that he would have no problems selling as there was a huge demand for undamaged houses in unaffected areas in ChCh. The GV is $579,000 and it is still on the market, after 6 months, but the price has been dropped to $470,000 and there are still no buyers. These are facts not spin.
I agree Andy. Harcourts has been talking their book since 2008. It is pure and unadulturated drivel. Two members of my family are taking their losses and moving back to the North Island. In the end it is about their kids. They still cling to mommy and daddy's legs, and have difficulty getting to sleep.
Actually had two clients who are moving to texas as a result of a corporate restructure nervously place their houses at auction in March, both reached prices higher than they expected and RV.
I also note your comment they are returning to the North island in your comments, if they came from there then more likely to return. Actually seeing a lot of positives in the Christchurch economy in certain sectors not all bad.
I've spoken to agents who say that a lot of the buyers are wealthier individuals that have moderate to severely damaged homes who are buying a second house to live in as a stop gap measure with the intention to rent it out or resell when the insurance (and maybe repairs) on their home are sorted.
Considering over half of the city's houses only have superficial damage if any, then this is actually a pretty poor result.
Expect once the initial rush of cashed up buyers is gone and people realise EQC is a shambles then sales of damaged properties will totally dry up.
Note that one of those March sales was for a Dallington property previously worth $270k with land value $130k. It sold for $30k with the house demolished and the EQC land claim still in place.
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