Housing demand for is pushing section prices up in Christchurch.
Sunday, May 13th 2007, 12:00AM
by The Landlord
One real estate analyst says it’s a classic case of supply and demand – a steady demand for residential sections and a dwindling supply of available land, leading to subdivisions being developed further afield, and prices rising.
Will Blake, valuations director for Simes Limited, says the median price for sections in the southwest of the city was about $170,000 a year ago, but is now close to $200,000.
“In Aidanfield, for example, 516 sections have been sold with a current median price of $220,000,” he says. “At Waitakiri, more than 60% of the sections have sold in a new subdivision by the golf course, and at Clearwater, half the latest release has sold with an average price of $475,000.”
He says there’s also a strong increase in prices of L2 and L3-zoned sections.
“Twelve months ago, this type of section cost about $300 per square metre. Now the going rate is closer to $400 per square metre,” he says.
“These often have old villas or bungalows on them, which are being bowled over and replaced by townhouses. That’s leading to higher-density housing and is changing the character of some suburbs.”
Blake says the price rise is even higher in the more central suburbs.
“In inner Fendalton, there have been land sales indicating values close to $1000 per square metre,” he says.
“This means the traditional quarter-acre section – if you can find one – is worth about a million dollars, with the value being placed on the land and the house being almost incidental.”
He predicts section prices will continue to rise with the phasing in of new council development levies. He says converting raw land into subdivisions is costing developers more and at least part of that cost will inevitably be passed on to buyers. He says it may also reduce the prices developers are prepared to offer for subdivisible land.
