The Christchurch property market has changed wildly since the earthquake on February 22. Affecting everyone from property owners to renters, the landscape of residential property availability and value will continue to shift as decisions are made about the future of the city.
Scarcity of rental properties
One of the most immediate results of the earthquake was a shortage of rental property available. The combination of a sudden surge of new renters (those who lost their property in the earthquake) and the sudden destruction of many of the city’s rental properties means that there just aren’t enough homes to meet the demand.
Christchurch property management companies are also facing difficulties with the loss of so many properties. Several companies have also reported problems with tenants abandoning their leases to leave Christchurch without notifying the property manager.
There are several possible scenarios from the rental market, including a trend towards commuting from rental properties as far away as Timaru or an increase in private rooms being leased out. Ultimately, it will depend on the decisions made by Christchurch residents.
Shifting property values
In addition to scarcity of property, the value of property in every area in Christchurch will now be completely reconsidered. For instance, last year’s premium properties in or near the central business district will face massive devaluation as the city centre remains empty.
Beach and hill suburbs can also expect some devaluation as the gravel-based land to the west, north and south provides a more stable foundation for homes. Assurance of structural soundness will become a higher priority of most buyers.
Meanwhile, value of properties in the western suburbs and commuter towns like Rangiora and Lincoln can be expected to rise as businesses find new offices in that direction. As the city’s landscape shifts, so will demand for property in convenient locations.
The Christchurch real estate market will likely remain unpredictable for the remainder of the year. A clearer picture will emerge when the city begins its rebuilding effort. Overall, the market is expected to pick up in the long-run, along with most sectors of the Canterbury economy. The decrease and increases in value of property in certain suburbs and towns, however, will likely remain in place for years to come.