Green zone homes in demand

Green zone homes in demand

Christchurch, October 29, 2012 - Sales of Christchurch City “Green Zone” properties are defying expectations that many would be unsalable for many years. Even those rated “TC3” - requiring further investigation if major repairs or rebuilds are required - are selling.

An analysis of sales by real estate agents in Christchurch City from February 2012 – September 2012 by the Real Estate Institute (REINZ) shows that from a base of 514 sales in February, activity peaked in May with 629 sales and has then declined through to September which recorded just 417 sales.

REINZ Regional Director, Tony McPherson says the slowdown is due to a shortage of houses on the market, not lack of demand.

“That is being reflected in the prices being paid which are returning in some instances above the pre-2008 peak values.” The median house price for Christchurch City properties was $345,000 in September 2012 compared with a median of $320,000 in September 2007.

Land in the green zone has been divided into three technical categories – TC1 (grey), TC2 (yellow) and TC3 (blue). TC3 properties, in particular, require site-specific geotechnical investigation and specific engineering foundation design, which is a common approach throughout New Zealand.

It is estimated that 20.3% of properties in Christchurch have been designated TC3. REINZ analysis shows that of the sales made in the eight months to the end of September, 11.4% were of TC3 properties.

“Obviously a significant number of home buyers understand what TC3 land classification is about, thus giving them confidence to make purchasing decisions on homes on TC3 land. We also see evidence of the old adage, ‘good properties in good locations attract strong interest,’ and this is no different with homes on TC3 land," Mr McPherson says.

“The majority of TC3 homes that are being sold require work within the EQC cap of $100,000. Typically the buyers are red zoners seeking to stay in the same neighbourhood, first home buyers taking advantage of low interest rates to escape high rents or people relocating to Christchurch.”

TC1 and TC2 properties are in greater demand. TC1 properties form 16.4% of all properties and accounted for 22.2% of all sales between February and September 2012, whereas TC2 properties form 57.7% of all properties and accounted for 66.3% of all sales between February and September 2012.

The Real Estate Institute of New Zealand has been a mark of quality celebrating an industry of Real Estate professionals for over a hundred years. REINZ has over 11,000 members specialising in all facets of the Real Estate arena.

ENDS

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