Sales in Christchurch TC3 zones

Final media release

Sales in Christchurch TC3 zones

Sales of TC3 homes have been gathering momentum with analysis by the Real Estate Institute (REINZ) showing sales have been strong in the last two months.

About 28,000 homes in the city are in the TC3 classification and may require foundation repairs or specialised foundation design for future building.

In the period from January – September 2012 11.4% of sales in Christchurch were TC3 properties. In the past two months this figure has increased, to 13% in October to 16.8% in November.

Christchurch-based Real Estate Institute Director Tony McPherson says the figures show that the residential housing market in TC3 is far from stagnant, and turnover has actually increased in TC3 areas.

“These figures reflect what our agents are seeing and hearing out in the marketplace. People living in TC3 should be encouraged by these results,” said McPherson. We are finding most of the buyers seeking properties in TC3 areas have substantial equity requiring only modest levels of finance.

“Often further investigation shows that many of the TC3 homes do not need substantial repairs. We are finding, however, that some professionals advising, or approving, clients’ purchases do not fully understand theTC3 requirements yet.This has prevented many potential buyers from participating in the market.”

There are two types of sales of TC3 property. The first is for an insured dwelling, normally still to be repaired with these rights of repair transferred with the property. The strongest purchasers for these properties are red zoned property owners seeking a home near their previous house. These buyers usually have high equity posing little or no challenge to lenders.

The second is the uninsured property where the owner has accepted an insurance payment for a total dwelling write-off. Property investors see these still habitable dwellings as a bonus when purchasing at what is effectively a section price.

“TC3 sales now have the old adagefeel of: ‘Preferred location, good home, high interest, selling strongly’, versus ‘Less preferred location, unattractive dwelling, low activity, difficult to sell’, which indicates things are pointing to normality in TC3 areas,” Mr McPherson says.

ENDS

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