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First-time home buyers are feeling the most stress in the Christchurch housing market, as they face rising prices and “queues outside the door” at open homes.
Median home prices in the city were $ 503,000 in September, 5.9 percent higher than a year ago, according to the Institute of Real Estate. The average number of days to sell was 30, up from 40 a year ago.
First-time home buyers are especially interested in getting on the ladder. Nationwide, they accounted for a record 25 percent of property purchases in the third quarter of this year, up from 17 percent in 2014.
Additional pressure comes from investors who take advantage of interest rates below 2.5% and target the same market.
STACY SQUIRES / Stuff
Christchurch man Jaydaev Negi says there is “a lot of interest” in open houses
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Jaydaev Negi, 30, was “shaking” when he finally secured his first home at auction with a bid of $ 375,000. You are now the proud owner of a two-bedroom apartment in St Albans that has an appraised value (RV) of $ 345,000.
He had searched for two months before deciding that he would have to look for smaller houses to stay within his price range.
“I am very excited, I have been to many open houses.”
Almost every open house had a “row outside the door,” he said.
“It’s that three-bedroom family house, with a little section for the kids or whatever, there are a lot of people looking at that.”
Breakfast
Home sellers can register their home on MyPitchList for free and wait for agents to bid on their listing.
He was recently at an auction for a home in Phillipstown, with a $ 330,000 motorhome, that sold for $ 425,000.
“That made me fly out of the water.”
Negi would have her son at home part-time, so she was excited about the nearby “big park and skate park” where she could run.
There has been a disproportionate increase in the sales prices of smaller homes in Christchurch compared to their larger counterparts, according to statistics from Trade Me Property.
Median sales price for one- and two-bedroom homes increased 12.3% to $ 398,200 compared to last year. This compares with a 3.9 percent increase in those with three or four bedrooms and a 5 percent drop in homes with five or more.
There was only room to stand at the auction where Negi bought his house, with about 40 people huddled in the room to bid on six properties.
His lot started at $ 250,000 and turned into a heated race for two bidders, first going up in steps of $ 25,000, before winning in increments of $ 1000.
Negi’s home was one of three properties with an RV under $ 400,000 that attracted a vigorous offer. They all sold for between $ 40,000 and $ 150,000 above their RV.
Supplied / Stuff
A property in Woolston with a $ 320,000 RV sold for $ 422,000.
One of them was an 800-square-meter four-bedroom house in Woolston. The bidding started at $ 320,000, despite the property having a $ 270,000 motorhome.
About five people bid on the property, but Shayna Black was the last at $ 422,000.
The 22-year-old accountant earlier said she was “starting to get fed up” after searching for six months without success.
“There wasn’t much on the winter list that I really liked. I have been struggling to find something suitable in the price range.
“I’m a little relieved it’s over.”
He had no particular limit in mind when he headed to the auction, he said.
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“I was just seeing how the room felt. I’d say a lot more people have been approved for bank mortgages and that’s not really helping, it’s just raising prices for people. “
A three-bedroom bungalow in Upper Riccarton sold for $ 400,000, $ 40,000 more than its RV and $ 80,000 more than the reservation.
The new owner, who did not want to be identified, was a 17-year-old who bought the property as an “investment”. He bought it with his 14-year-old brother with money from the inheritance.
Supplied / Stuff
A home in Strowan sold for $ 1,350,000 to a buyer outside of Christchurch.
She was undecided if she would live there and planned to sell it later for capital gains, she said.
The higher end of the market performed poorer in the auction.
A five-bedroom home in Mt Pleasant with a $ 750,000 motorhome attracted no initial offers and did not sell that day. The situation was the same for the four-bedroom villa in the Cashmere Hills with a little over $ 1 million motorhome.
A five-bedroom home in Strowan sold for $ 1.35 million to a buyer outside of Christchurch. The auction ended at $ 1.34 million, which was still below market value, before trading for another $ 10,000.
Of the three bidders for the property, Chris and Rae Maurice were the only ones based in Christchurch. They had returned from the UK prior to the first Covid-19 shutdown, although their movement was not related to the pandemic.
Despite being unsuccessful that day, Chris Maurice said there didn’t seem to be as much demand as they expected in their price range.
“I don’t see that kind of eating frenzy.”
Ray White’s South Island regional manager Jane Meyer said warming of the lower end of the market generally resulted in higher prices across all ranges.
“First-time home buyers are taking a home off the market without a replacement, so it drives that supply and demand.”
Lower interest rates meant investors were returning to the housing market as they would get better returns than at the bank, he said.
Unfortunately for first-time home buyers, they often targeted the same properties.
“That’s where they get that return, it’s a safer option to be. There is also that sense of urgency, of ‘I don’t want to miss out.’
