South Island buyers are more upbeat about the housing market

Waitaki district house and land values have increased in the recent Quotable Value (QV) valuation...
One in four South Islanders believe house prices in their area are too high, but despite this, more than a third are confident they could buy a house in the current market.

The results of the latest OneRoof-ConsumerLink Housing Survey show that Kiwis in the South island are less despondent about the housing market than their counterparts in the North Island.

The poll found that 81% of Kiwis nationwide thought house prices were too high, with the figure rising to almost 90% in Wellington. However, 74% of South Islanders thought house prices were too high, and 18% thought prices were about right, compared to 12% nationwide, and 10% in Auckland and Wellington.

The poll also found that South Islanders are more upbeat about the housing market than Kiwis in the North Island. Thirty-eight percent of South Island respondents said they felt very confident about buying a home in the current housing market, compared to 26% nationwide and 19% in Wellington.

Canterbury was an exception to the South Island trend, with 24% of respondents in the region confident about buying a house and 14% thinking house prices are about right.

Tall Poppy Christchurch agent Debi Pratt isn't surprised by the South Island results, saying that even buyers in Christchurch realise the city’s housing market offers value for money.

“Christchurch had been ignored for quite some time after the earthquakes, and prices were flat,” she said.

“But from mid-2020, the city had a big influx of Auckland and Wellington buyers. I was getting a lot of offers from out of town. People were not even seeing the properties in person.”

Christchurch prices spiked last year - unusual for a market that is usually very steady, says Pratt. “Even though we've had a big spike in prices, you can still own a beautiful home here for a fraction of the cost of houses in Auckland, Wellington and Tauranga.”

While the market has softened in recent months, Pratt says buyers are taking a risk if they hold off purchasing in the hope that prices will fall. “My response to that is I think it’s a mistake. The best time to buy property is yesterday, so long as you don’t have to sell in the middle of a dip or under pressure. When those borders open up, Christchurch is going to be the place to be.”

She added: "I don't think that we're necessarily priced too high. I sold in Remuera [in Auckland] for eight years prices there were high. You can take your money out of an average home in Remuera and buy a palace in Christchurch and still put money in the bank.”

The shift to remote working has meant that Aucklanders could shift to Christchurch and still keep their job. “That has never, ever been in our property landscape before.”

Even new homes in Canterbury are cheaper than those in the North Island, Pratt says.

LJ Hooker agent Jason Hynes is seeing the same level of positivity among buyers in Dunedin, but for different reasons. Mortgage repayments are still very reasonable compared to the cost of renting in Dunedin, he says. “There has been a pretty high level of enthusiasm based on that for owning your own home.”

The other advantage that buyers will have noticed in the current market that helps them feel more positive is that properties are taking a little longer to sell, which means the pressure is off to make decisions quickly.

“Now they've just got a little bit more time to find something that you know, maybe fits their needs a little bit better, and that's not a bad.”

It’s a similar story in Blenheim, says Harcourts agent Craig Searle. Rents in the Marlborough region have risen in recent years. “When you compare the amount of money that you're putting into a property in terms of rent every year, you are better off in a lot of cases looking for a first home.”

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