House prices up or down in 2018?
A flat housing market, a new government, a changing economy. Do they add up to the sort of uncertainty that could make Christchurch house prices take off, either up or down, this year? Or has the city, after several post-earthquake years of housing upheav
Although national headlines in 2017 talked of rising rents and prices and a housing shortage, Christchurch has flat house prices and falling rents after years of new construction and repairs. But the end of 2017 saw several events that could affect demand for homes, sending prices either up or down.
The coalition Government has already moved to restrict house buying from offshore and signalled it would follow through with plans to cut immigration. Both moves would trim demand for houses.
Higher interest rates, forecast by pundits for 2018 as the economy slows, would deter some buyers.
Demand, however, is expected to get a minor boost after the Reserve Bank’s November loosening of restrictions on mortgage deposits. Any major government building initiatives to boost supply of homes would be unlikely to spread to Christchurch, with developers already reportedly struggling to sell new homes in some areas.
BNZ Bank economist Tony Alexander noted in a recent analysis piece that, historically, house prices have risen at double the rate under Labour governments than under National ones.
State valuer Quotable Value’s (QV) figures show that after peaking at $501,000 a year ago, Christchurch’s average house value is now about $494,000.
Nick Goodall, senior research analyst at Core-Logic, which provides analysis for QV, said Christchurch’s situation is very different from the rest of the country. After the disruption of the earthquakes, the city’s housing market is in a consolidation phase, he says. Supply is adequately supplying demand, population growth is slowing and residential construction is winding down after several busy years of rebuilds and repairs.
Robin Clements, a Christchurch-based senior economist with UBS, says the effects of politics on housing markets will depend on how ‘‘hard and fast’’ the new Government goes with its plans. ‘‘There’s such a lot of policy uncertainty, we don’t know precisely what they are going to do and how quickly changes would be implemented. Some ideas look like being tougher to implement than the new Government thought,’’ he says. Already, some policies such as ban on overseas sales have been watered down, he says. Much of the population rise is not because of new migrants, but because ‘‘Kiwis have stopped leaving and heading overseas. You can’t make them go’’.
The flow-on effect from any major immigration changes in Auckland would influence Christchurch, but the latter is ‘‘not short on supply’’ of homes, he says. Expected interest rate rises in 2018 would have a dampening effect on
sales and prices. ‘‘There are just so many balls in the air.’’
Clements says there are global
When Ted Packer bought an overgrown quarter-acre Westmorland section for $1500 nearly 60 years ago, the area offered little more than a dirt path leading to a makeshift sign christening it ‘‘Happy Home Track’’.
His wife had combed the hills for a suitable property for the pair until they found a dairy farmer willing to part with a plot of land on what is now Happy Home Rd. Named after James Francis’ once prominent farm, the street is one of dozens of Christchurch addresses boasting aspirational names.
Blossom Lady Lane, in Templeton, was named after a successful racehorse. Spreydon’s Cherrytree Lane is a tribute to the former site of Cox’s Nursery.
Flower, Oak, Rata and Rose streets; Flora, Marigold, Peartree and Tulip lanes; and Elmwood and Orchard roads are nods to the Garden City heritage.
Packer, 85, has lived on Happy Home Rd since 1960. As decades passed, the dense track morphed into a thriving residential community. Neighbours came and left. Water and access issues arose and were resolved. His wife died years ago; his son moved out, married, and moved back to the land again. Alterations transformed his cozy dwelling several times.
Packer, a retired cabinet maker, said it was a ‘‘real credit to live on a street with a name like that’’: ‘‘It get’s a reaction every time.’’
Equally pleasant sounding are Joy and Hope streets in Shirley, and Liberty St in Wigram.
Cashmere’s Majestic Lane sounds, well, majestic. John Smith, the most long-standing resident of the lane’s eight houses, agrees.
Named after the former Majestic Theatre, which was converted into a popular nightclub in 1970, Smith and his wife have a special connection to the street’s quirky name.
‘‘The first time me and my wife ever went out together about 50 years ago we went to the Majestic Theatre, so we thought ‘that’s got to mean something this is special, it’s meant to be’.’’
The Smiths had ‘‘taken a ribbing’’ for the pretentious name over the years, but could not imagine leaving.
‘‘We’re both retired now, so we seriously considered downsizing, but we couldn’t find anything that compared.
‘‘After a few days here, one of the neighbours called and invited us to the Christmas dinner. It started a lovely relationship with the lane, and the people in it. Now we’re the last [original] ones left.’’
Over in Heathcote, Diane Bate is ‘‘tickled’’ by her street name: Butts Valley Rd.
She moved there in 1963. In half a century, she and her husband have seen plenty of development – notably when the road was sealed as more families moved into the area and properties cropped up all along its edge.
The area was once named Lees Valley, in honour of legislator George Leslie Lee who owned two blocks in Horotane Valley, but was re-named Butts Valley around 1915.
Bate eventually modernised their ‘‘lovely, quant, quiet little old cottage’’ to a newer home further up the hill, where she lived with her adult daughter and cat, Toodles.
‘‘Back then it was a beautiful, peaceful spot with plenty of trees and lovely greenery – it still is. The name always tickles me, makes me think of rifle butts and the sort.’’