For much of the last 10 years, Canterbury’s housing market has been overlooked. The region was hit hard by the Christchurch earthquakes, and house price growth was mostly non-existent in the years since.
Between April 2017 and April 2020, the region's average property value grew just 6%, from $507,000 to $534,000, well below the nationwide growth rate of 14% over the same period, and the 33% growth rate enjoyed by Greater Wellington.
But all of that changed post-Covid, when Canterbury’s housing market finally started to record substantial growth.
The region’s average property value jumped 9.3% in the last months of 2021 and while it is unlikely to see those super-charged growth rates again, it is still powering ahead while house values in other parts of the country take a dive.
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The latest OneRoof-Valocity house value figures show Canterbury’s average property was up 2.1% ($16,000) to $792,000 in the three months to the end of June. Meanwhile, Greater Wellington’s average property value fell 8.3% ($95,000) over the same period and Auckland’s dropped 4.3% ($67,000).
At a TA level, quarterly growth was strongest in Waimate (up 6.2%) and Hurunui (up 3.7%). Christchurch is still humming, with its average property value up 2.2% ($17,000) to $795,000 and it's likely it will be crossing the $800,000 mark before winter's close.
However, there are weaknesses in the region. Selwyn, Canterbury's most expensive TA, recorded minimal growth over the quarter, with its average property value up just 0.3%, a come-down from the 12% growth it enjoyed in the last three months of 2021. Kaikoura, which has its own unique problems, was down 0.3% over the quarter, and Mackenzie, while up 1.3% over the same period, is only 7.3% ahead of where it was a year ago. Both markets are experiencing a fair amount of volatility, driven by low sales.
Justin Haley, residential projects and divisional manager for Bayleys Christchurch, says the region doesn’t have the same “jet-fuelled growth” of the larger cities and is insulated against a correction or plateau because there is never the enormous growth.
“We seem to have consistent growth but never jet-fueled, accelerated growth. After the party there's always a hangover, so we probably don't party as hard and therefore we never have a hangover.”
Haley says Baleys is sitting at about a 50% auction clearance rate, which is a pretty normal market in Christchurch. “We've been used to the heights of 70 to 90% over the last two years but that was never sustainable so we're quite happy.”
Properties across a range of types and locations are selling well, he says.
Last month, a new three-bedroom family home on Monte Crescent, in Lincoln, Selwyn District, sold for $1.05m at auction, and an “as is, where is” house in inner-city Christchurch, at 31 Worcester Boulevard, sold for $2.625m to developers.
The sale at Worcester Boulevard was about the value of the 855sqm site the house sat on. “It's right in the centre of town, opposite the art centre and just down from the art gallery,” Haley says.
Another home, a super modern one on Marama Crescent, in Mount Pleasant, sold for $3.72m, well above the vendors’ expectations.
Mount Pleasant has a mix of homes but this five-bedroom home would hold its own in Auckland’s blue chip suburb of Remuera, Haley says.
A three-bedroom new home on Monte Crescent, in Lincoln, Canterbury, sold at auction for $1.05m. Photo / Supplied
An "as is, where is" property on Worcester Boulevard, in central Christchurch, was snapped by developers for $2.625m. Photo / Supplied
Canterbury is still undervalued by comparison to the rest of the country, he says, and “you can't correct on something that's not overpriced”.
Part of the reason it’s undervalued is because unlike other parts of the country, the area is not geographically challenged. When there is pressure, such as after the earthquakes, there has been the opportunity to open up another area for development.
“They basically need more land and we rezone it and we move west. It's the great urban spread. We just go and turn another greenfield into a residential section and build,” Haley says.
Being able to spread out and build also keeps prices contained. “We got our price growth here when we finally ran out of zoned land and our land prices doubled and we've had two years of really solid growth.”
The growth spilled over into Selwyn District, and 8000 displaced red zone owners were able to relocate to the northwest corner, Haley says. “Rangiora boomed and then we had Rolleston and West Melton and Prebbleton, all that belt that we call the northwest outer. There was enough land out there too absorb those 8000 relocators.”
Selwyn has been the fastest-growing district in New Zealand for most of the last 10 years, Haley says.
Aucklanders, too, have been moving south, looking for better for better house prices, less commuting and a better quality of life. “We’re good value for money, jobs are good, and we're finally deemed as having repaired our inner city.”
This five-bedroom luxury home on Marama Crescent, in Mount Pleasant, Christchurch, sold last month for $3.72m. Photo / Supplied
A four-bedroom home at 69 Cotswold Avenue, in Bishopdale, Christchurch, is priced at $721,000. Photo / Supplied
There are modern, attractive commercial buildings and “everywhere” is 20 minutes from “everywhere”.
Popular areas include suburbs in the high school zones, which include Merivale, Fendalton, Bryndwr and St Albans, but there’s no real pattern to what people are buying, he says.
Tony Jenkins, CEO of Harcourts Holmwood, which has five offices in Christchurch, also says auction room sales are strong. “At the end of June we had 10 sell under the hammer out of 12 options so our under the hammer results are 71% year to date so we’re still batting pretty well I think.”
There is change in the air, though, he says. The volume of sales in Canterbury is down (from 737 in 2021 to 571 this year) and buyers are a bit more choosey, but there are still good sales being made.
“I think there's still a shortage of properties for sale here so there's not huge listings numbers around.”
There is good demand from first home buyers across Canterbury, especially in areas like Bishopdale, Spreydon and Beckenham. “It's still a very good market here. We haven't had the highs and lows you get in Auckland.”
Harcourts has several good value properties on its books, including 69 Cotswold Avenue in Bishopsdale, which is priced at $721,000, and it recently sold a home needing renovation work on Condell Avenue, also in Bishopdale, for $850,000.
While Christchurch is more affordable than Auckland and Wellington further south is cheaper still, as the recent sale of the old Temuka courthouse demonstrates, which OneRoof understands fetched $360,000.
A three-bedroom Bishopdale home needing renovation work recently sold for $850,000. Photo / Supplied
The old courthouse on King Street, in Temuka, attracted overseas interest. Photo / Supplied
Agent Vicki Jones, of Temuka Real Estate, says there was a “heck of a lot of interest” in the historic property despite it needing a fair bit of work, which she says the new owners plan to do and they also to move the building to a section above Westport.
The courthouse was built in 1870 and was also used as a maternity home before being used as a residential home.
Jones had interest from overseas about the property, saying her first phone call, within minutes of it going on the internet, was from Melbourne.
“I've had people from Invercargill, I've had a lot from Auckland, and I had to do a lot of video calls to people that have been historical home restorers.
“The inquiry I had on it in the first few months was exhausting. Probably in the first four weeks there wouldn't have been an hour a day that I didn't have a phone call on it.”
The courthouse is on a high-profile corner and it has street appeal with a half wrap around verandah, but while a couple of developers inquired most the interest came from people interested in the house and its history.
The price fetched was around Temuka’s median, but you can pick up a property for much less than that – Jones has a two-bedroom cottage listed for $269,000.
- Find more properties for sale in Canterbury here
