THE PRESS - Looking for a piece of land to build on?  Be prepared to reach deep into your pocket if you are buying in Christchurch.  New arrivals to our peaceful and sunny shores may have different dreams as to what they want from their new country, but one thing they will all need is a home. New Zealand has had more immigrants in the past five years, a trend which peaked three or four years ago and closely matches changes in housing prices. Immigration policies mean many new arrivals have plenty of money and able to pay high prices for property.
With enough new homes being built to fill two new streets a day around the country - Land Information New Zealand says we got 866 new streets last year - it’s no wonder there’s demand for sections. And it’s no surprise that they are going up in price, too, with the median (mid-point) section price in the country about $175,000, according to Real Estate Institute sales figures. In Christchurch, the slice of Kiwi paradise is costing even more, with the median section price in the city exceeding $200,000 in nine out of the last 12 months. Christchurch valuer Will Blake points the finger at a dwindling supply of available land in the face of steady demand. Blake, director of valuation for real estate and valuation company Simes Ltd, calls the situation a classic case of supply and demand. The shortage of land is leading to fewer subdivisions being developed and prices rising, he says.
Blake gives as an example sections in the south-west of the city, where areas such as Halswell have been home to many of the city’s new subdivisions in the last few years. Sections in the south-west were selling for about $170,000 a year ago, but are now close to $200,000, Blake says. In Aidanfield, for example, 516 sections have been sold with a current median price of $220,000, he says. At Waitakiri, more than 60 per cent 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. Blake says there is also a strong increase in prices of L2 and L3-zoned sections closer to town, which can be more intensively developed for townhouses or units. The going rate for L2 and L3 sections has risen from $300 a square metre a year ago to $400 a square metre now, he says. Blake and other valuers are predicting section prices will continue rising as new council levies, designed to shift downstream costs of development from ratepayers to section buyers, are phased in. In Christchurch, these would see the contribution for developing an average residential section almost double from the present $15,000 to almost $30,000, over the three-year phase-in period. Increased rezoning of land, a reduction in development levies, a drop-off in immigration, or a combination of these would be needed to take the pressure off section prices. So while buying a section may mean a deep dip into the pockets now, things may not be getting better any time soon.