Garden City moves Christchurch’s affordability
New Zealand’s second biggest city, Christchurch, is bucking national house price trends because politicians and building firms acted urgently after the 2011 earthquakes.
The earthquakes destroyed up to an estimated 20,000 Christchurch homes (12,000 red zoned), and the near-complete task of rebuilding them means prices have plateaued,even as the city returns to net population gain.
‘‘It will take some real effort in Auckland. Gerry (Brownlee, Earthquake Recovery Minister) was lucky because there were builders like Ngai Tahu ready to go,’’ former chief executive of Ngai Tahu Property, Tony Sewell, said.
‘‘What they face in Auckland are owners of paddocks who aren’t necessarily developers, and they’re not ready to go,’’ Sewell said.
Christchurch’s rebuild was also fast-tracked by district zoning enacted by Brownlee, using special earthquake legislative powers.
‘‘At Prestons (a 2300-home subdivision in north east Christchurch) we were already so close to starting, the nudge Gerry gave was not substantial, but he closed the gap,’’ Sewell said.
‘‘Now we’re reaching a balance of supply and demand and there’s a risk supply will outstrip demand,’’ Sewell said.
Fallout may hit some undercapitalised building companies with unsold stock, but historical trends showed flat lining of prices rather than collapse, even if the occasional over-mortgaged individual might take a bath, Sewell said.
Co-author of the annual house affordability Demograhia survey, Hugh Pavletich, credits neighbouring councils Waimakariri and Selwyn for speed in granting building consents for towns such as Rangiora and Rolleston
This acted as a vent on prices in the wider region, he said.
Rolleston’s population has swelled from 9000 to about 14,000 as part of the flight west to stony ground less affected by earthquakes.
Resource management lawyer Jo Applyardsaid most of the plan was already in place before the earthquakes but Brownlee sped up rebuilding for some places such as Kaiapoi where homes had been red zoned.
Sewell agreed Selwyn District and Waimakariri had handled processes better, even before the earthquakes.
‘‘Look how long it took Ngai Tahu to get zoning at Wigram Skies (within the western city boundary). I’m sure Christchurch City Council will have many good reasons but the fact is ratepayers moved more quickly to become Selwyn and Waimakariri ratepayers and we’ve lost them.
‘‘Our approach of house and land packages is driven out of lack of capital. I think it’s a sunset industry where you go along to a building company and tell them what you want and then it takes six months to build.
‘‘In California or London you just buy a completed house like you would buy a car, and that’s what modern young couples want. New homes are much warmer for a start,’’ Sewell said.
Mike Greer of Mike Greer Homes builds properties in Christchurch with the help of modular computer-controlled production at a factory.
His firm is building at Hobsonville and Stillwater in Auckland. Prices start at $800,000 compared with the same house in Christchurch at $500,000 - the difference is the cost of the land and some council charges.
Greer is seeking a large Auckland site to roll out several hundred houses quickly and has secured land for a modular-production factory at Pokeno.