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Bayleys Research
MARKET OVERVIEWThe median sale price of residential property in the Christchurch /Rangiora region increased by approximately $22,000 during 2007 finishing the year at $335,000 according to sales statistics released by the Real Estate Institute of New Zealand. (REINZ) In line with most other regions throughout the country however, a majority of the increase occurred during the early part of the year with prices over the second half fluctuating as sales activity slowed. At the end of the June quarter the median value had risen to $330,000 up from the $313,300 recorded at the end of 2006. Subsequently values dropped to $325,000 in the three months to September before recovering again in the final quarter. Whilst values continued to trend upwards during the year, sales activity slowed with the number of sales recorded by REINZ falling from just over 10,600 in 2006 to approximately 9,530 in 2007. The slow-down is even more marked when compared with 2003, the peak of the latest property “boom”, when almost 10,880 properties changed hands. It should be noted, that sales activity in 2007 was ahead of those witnessed in 2002 and therefore remains in line with the longer term trends.
It is likely that 2008 will see a continuation of the trends experienced in the latter half of 2007. This includes lower levels of market activity across the region with median values also easing back in the short term as evidenced by the provisional figures released for the March quarter which show the median to have slipped to just above $325,000. It also seems probable that sales volumes will continue to ease while interest rates remain high. It is likely therefore that prospective purchasers will take their time to make final decisions as they will no longer be under the same pressure to act quickly as they have been in the last few years and this will lead to the days on market period continuing to extend.
The impact of the sharp increase in values on the Christchurch and Rangiora residential market experienced since the beginning of the century is clearly illustrated in the graph below. In 2000 nearly 73% of residential property sales were transacted at under $200,000. By 2007 sales within this bracket had fallen to only approximately 5%. In 2007 the largest proportion of sales, with just over 65% share, were completed at between $200,000 and $400,000. A further illustration is the fact that in 2000 only six were concluded at over $1,000,000 while in 2007 this figure had risen to 115.
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